HVIDE MARINE INC, 424B4, 1996-08-12

HVIDE MARINE INC
424B4, 1996-08-12
DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT

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Filed Pursuant to Rule 424(b)(4)
Registration No. 33-78166
PROSPECTUS

AUGUST 8, 1996
7,000,000 SHARES
[LOGO]
CLASS A COMMON STOCK

All of the shares of Class A Common Stock offered hereby are being sold by
the Company. Prior to this offering (the "Offering"), there has been no public
market for the Class A Common Stock. See "Underwriting" for information relating
to the factors considered in determining the initial public offering price.

After the Offering, the Company's issued and outstanding capital stock will
consist of Class A Common Stock and Class B Common Stock. Each holder of Class A
Common Stock is entitled to one vote per share and each holder of Class B Common
Stock is entitled to ten votes per share on all matters submitted to a vote of
stockholders. Except as required by law and the Company's Articles of
Incorporation, holders of the Class A Common Stock and the Class B Common Stock
vote together as a single class. Each share of Class A Common Stock and Class B
Common Stock will share ratably in any dividends or other distributions,
including upon the liquidation, dissolution, or winding up of the Company.
Ownership and control of the Class A Common Stock by persons not citizens of the
United States are limited by the terms of the Company's Articles of
Incorporation. See "Description of Capital Stock."

The Class A Common Stock has been approved for listing on the Nasdaq
National Market under the symbol "HMAR."

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
<S> <C> <C> <C>
Per Share.............................................. $12.00 $0.84 $11.16
Total(3)............................................... $84,000,000 $5,880,000 $78,120,000
</TABLE>

(1) See "Underwriting" for indemnification arrangements with the Underwriters.

(2) Before deduction of expenses payable by the Company estimated at $2,200,000.

(3) The Company has granted the Underwriters a 30-day option to purchase up to
1,050,000 additional shares of Class A Common Stock at the Price to the
Public less Underwriting Discounts and Commissions, solely to cover
over-allotments, if any. See "Underwriting." If such option is exercised in
full, the total Price to the Public, Underwriting Discounts and Commissions,
and Proceeds to the Company will be $96,600,000, $6,762,000, and
$89,838,000, respectively.

The shares are being offered by the several Underwriters when, as and if
delivered to and accepted by the Underwriters and subject to various prior
conditions, including their right to reject orders in whole or in part. It is
expected that delivery of the shares will be made in New York, New York, on or
about August 14, 1996.

DONALDSON, LUFKIN & JENRETTE HOWARD, WEIL, LABOUISSE, FRIEDRICHS
SECURITIES CORPORATION INCORPORATED
<PAGE>

Description of Picture: Description of Picture:
The Seabulk California The OMI Hudson and the tug Broward

Caption:
Caption:
One of Hvide's 180-foot supply The offshore tug Paragon fills many
boats, the Seabulk Alabama, in roles in exploration, production,
transit to an offshore production construction and transportation
platform.

Description of Picture:
The Seabulk Texas at an offshore location.

Caption:
The Seabulk Texas, a 180-foot supply boat, servicing an offshore drilling rig in
the Gulf of Mexico.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>

Description of Picture: Description of Picture:
The Seabulk Georgia supply boat A sideview of a crew boat
carrying a crew boat

Caption: Caption:
The Seabulk Georgia supply boat One of the Company's 110-foot crew
carrying one of the Company's crew boats en route to a drilling
boats to an international location
destination.

Description of Picture:
The Seabulk America at sea

Caption:
The 46,300 dwt capacity Seabulk America is the only chemical carrier to enter
service in the domestic trade since 1984.

<PAGE>
Description of Picture: Description of Description of Picture:
Picture:
The OMI Hudson The OMI Dynachem The OMI Star

Caption: Caption: Caption:
The multi-directional The OMI Dynachem (pictured) The OMI Star, a 260,000
tractor tug Broward and OMI Hudson are 360,000 barrel, 37,500 dwt
moves astern as fast barrel, 50,900 dwt capacity capacity chemical
as ahead. chemical carriers. carrier.

<PAGE>
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and consolidated financial
statements (including the notes thereto) appearing elsewhere in this Prospectus.
Except as otherwise indicated, all information in this Prospectus (i) gives
effect to a 1.584274-for-1 stock split to be consummated immediately prior to
the Offering, (ii) reflects the consummation of the Acquisitions (as defined and
described in "Business--The Acquisitions"), (iii) gives effect to the exchange
of certain outstanding indebtedness of the Company for shares of Class A Common
Stock and Class B Common Stock and the exchange of all shares of Class C Common
Stock for Class A Common Stock and Class B Common Stock as described in "The
Company," and (iv) assumes no exercise of the Underwriters' over-allotment
option. Unless the context otherwise requires, all references in the Prospectus
to the "Company" or "Hvide" include Hvide Marine Incorporated, its predecessors,
and its consolidated subsidiaries. See "Glossary" for definitions of certain
terms used herein.

THE COMPANY

Hvide (pronounced "vee-dah") provides marine support and transportation
services primarily in the U.S. domestic trade and principally to the energy and
chemical industries. The Company is the third largest operator of supply and
crew boats in the Gulf of Mexico. In addition, the Company is the sole provider
of commercial tug services in Port Everglades and Port Canaveral, Florida, and a
leading provider of such services in Mobile, Alabama. The Company also
transports petroleum products and specialty chemicals in the U.S. domestic
trade, a market insulated from international competition under the Jones Act.
The total capacity of the Company's five chemical carriers, pro forma for the
Acquisitions, represents approximately 44% of the capacity of the domestic
specialty chemical carrier fleet. In addition, the Company has options to
acquire up to a 75% interest in five double-hull petroleum product carriers
currently under construction for delivery during 1998.

The Company has grown rapidly through a series of strategic acquisitions,
increasing its marine support fleet from 20 vessels in 1993 to 74 vessels
currently and its marine transportation fleet from three vessels in 1993 to 29
vessels currently, in each case pro forma for the Acquisitions. As a result, the
Company's revenues increased 196% from $41.5 million in 1993 to $123.0 million
in 1995, on a pro forma basis. Over the same period, the Company's EBITDA
increased 181% from $11.3 million to $31.7 million and its income from
operations increased 187% from $6.6 million to $18.9 million, in each case on a
pro forma basis. For other measures of the Company's operating results as
determined under generally accepted accounting principles and its pro forma
operating results, see "Selected Historical and Pro Forma Consolidated Financial
Data" and the Company's consolidated financial statements.

The Company's strategy is to realize the benefits presented by the
integration of its recent and pending acquisitions with its existing operations
and to continue to grow through selected acquisitions that further consolidate
the marine support and transportation services markets in which the Company
operates. The Company believes it has numerous opportunities to make further
accretive acquisitions in its core businesses. Critical elements of the
Company's strategy include continuing to (i) utilize its demonstrated expertise
in acquiring and consolidating diverse marine operations, (ii) focus its
operations in the U.S. domestic trade, (iii) develop and apply marine technology
to meet its customers' needs in an innovative and cost-effective manner, (iv)
maintain and pursue long-term customer relationships that limit the risk
associated with the investments required for new vessels and mitigate the
effects of industry cyclicality, and (v) enhance its record of quality service
and safety.

MARINE SUPPORT SERVICES

Offshore Energy Support. The Company's fleet of 63 offshore energy support
vessels, pro forma for the Acquisitions, consists of 24 supply boats, 37 crew
boats, and two utility boats that transport supplies and personnel and provide
towing and other support services to offshore oil and natural gas exploration
and production operations, primarily in the Gulf of Mexico. The offshore energy
support industry in the Gulf of Mexico has experienced substantial consolidation
and vessel attrition during the

3
<PAGE>
past decade. As a result, the Company believes that industry fundamentals have
improved, resulting in increasing day rates and utilization, and expects this
trend to continue through further consolidation. The Acquisitions strengthen the
Company's position as the third largest operator of supply and crew boats in the
Gulf of Mexico. This strengthened position will make the Company's operations
more susceptible to fluctuations in oil and gas prices, which affect the level
of offshore exploration and development activity and thus the demand for the
services provided by the Company's offshore energy support vessels. In the past,
the Company has sought to mitigate the adverse effect of reduced demand through
cost reduction and relocation of support vessels to other markets. See "Risk
Factors -- Cyclical Industry Conditions" and "Business--The Industry--Marine
Support Services."

Offshore and Harbor Towing. The Company's 11 tugs provide offshore towing
services and harbor assistance to tankers, barges, containerships, other cargo
vessels, and cruise ships calling at Port Everglades and Port Canaveral,
Florida, and Mobile, Alabama. Port Everglades and Mobile are among the fastest
growing ports in the United States. In Port Everglades and Port Canaveral, the
Company is the sole franchisee providing commercial tug services. The Company
recently directed the design and construction of a technologically advanced
5,100-hp tractor tug, the Broward, delivered in 1995, designed to provide escort
services to tankers and other large vessels and specialized services to the
offshore energy industry, such as deepwater facilities installation support.
Through the combination of the distinctive underwater shape of its hull and its
omni-directional propulsion system, a tractor tug can control the direction of
an assisted vessel more effectively and can develop greater relative pulling
power than a conventional tug.

MARINE TRANSPORTATION SERVICES

Chemical Transportation. The total capacity of the Company's five chemical
carriers, pro forma for the Acquisitions, represents approximately 44% of the
capacity of the domestic specialty chemical carrier fleet, and four of the five
vessels are among the most recently built and the only independently owned,
diesel-powered chemical carriers with full double-bottom hulls operating in the
U.S. domestic trade. Two of the carriers currently transport industrial
chemicals in bulk parcel lots and the other three carriers currently transport
petroleum products and petrochemicals, primarily for major oil companies. The
Company believes that domestic energy and chemical transportation freight rates
will increase within the next three to five years and continue thereafter, as
the supply of vessels eligible to carry petroleum products diminishes as a
result of mandatory retirement imposed by the Oil Pollution Act of 1990 ("OPA
90").

Petroleum Product Transportation. The Company's petroleum product
transportation fleet is currently comprised of the Seabulk Challenger, a 39,300
dwt product carrier, and a fleet of ten towboats and 13 fuel barges. The Seabulk
Challenger has since 1975 operated under successive charters to Shell Oil
Company ("Shell") (extending to January 2000) carrying refined petroleum
products from Shell's refineries in Texas and Louisiana to various U.S. Gulf of
Mexico and Atlantic coast ports. The towboat and barge fleet is engaged in the
transportation of residual and diesel fuels along the Atlantic intracoastal
waterway and in the St. Johns River in Florida, primarily for a major Florida
utility.

The Company also owns a minority interest in five 45,300 dwt double-hull
petroleum product carriers currently under construction for delivery during
1998. The product carriers are intended to serve the domestic market currently
served by single-hull tankers whose retirement is mandated by OPA 90. The
Company, whose ownership is currently 2.4%, has options to purchase up to an
additional 72.6% ownership interest in the vessels for a total estimated cost of
up to $32.0 million (assuming exercise of the options before January 1, 1998).
The Company is supervising the construction of the vessels and will provide
operational management following delivery.

OPA 90. OPA 90 requires, among other things, that existing single-hull
vessels must be retired from domestic transportation of petroleum products
between 1995 and 2015 unless retrofitted with double hulls. The Company's
chemical carriers and its petroleum product carrier will be required to cease
transporting petroleum products at various dates from 2003 to 2015, and its fuel
barges will cease transporting fuel in 2015. See "Risk Factors -- Mandated
Removal of Vessels from Jones Act Trade." The Company currently has no specific
plans concerning the retrofitting or replacement of such vessels.

4
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock Offered......... 7,000,000 shares
Common Stock to be Outstanding
After the Offering:
Class A Common Stock............. 7,485,291 shares(1)
Class B Common Stock............. 3,419,577 shares(2)
Total........................ 10,904,868 shares
Voting Rights........................ After the Offering, the Company's outstanding capital
stock will consist of Class A Common Stock and Class
B Common Stock (together, the "Common Stock"). Each
holder of Class A Common Stock is entitled to one
vote per share and each holder of Class B Common
Stock is entitled to ten votes per share on all
matters submitted to a vote of stockholders. Except
as required by law and the Company's Articles of
Incorporation, holders of the Class A Common Stock
and the Class B Common Stock vote together as a
single class. After the Offering, the holders of the
Class A Common Stock and the Class B Common Stock
will have 18.0% and 82.0% of the voting power of the
Common Stock, respectively. See "Description of
Capital Stock."
Upon completion of the Offering, J. Erik Hvide, the
Company's Chairman, together with certain trusts of
which he is the trustee (the "Hvide Trusts"), and a
group of investors (the "Investor Group") that in
September 1994 purchased shares of Common Stock,
Common Stock Contingent Share Issuances, and the
Company's Junior Notes and Senior Notes (each as
defined herein), will own shares that will represent
16.2% and 18.4%, respectively, of the outstanding
shares of Common Stock (14.8% and 16.8%,
respectively, if the Underwriters' over-allotment
option is exercised in full) and 42.4% and 40.5%,
respectively, of the voting power of all Common Stock
(41.4% and 39.5%, respectively, if the Underwriters'
over-allotment option is exercised in full). In
addition, Mr. Hvide and the Investor Group have
entered into an agreement to vote their shares
together to nominate eight and three persons,
respectively, to the Company's 11-member Board of
Directors. The Company's Articles of Incorporation
require that certain significant transactions be
approved by 95% of the holders of the Class B Common
Stock, which is held entirely by members of the Hvide
Family (as defined herein) and the Investor Group.
See "Description of Capital Stock-- Certain
Provisions of Articles of Incorporation and By-Laws"
and "--Shareholders Agreement" and "Risk Factors--
Control by Current Stockholders."
Use of Proceeds...................... To pay a portion of the cash purchase price of the
Acquisitions and to repay a portion of the Company's
indebtedness.
Conditions to Closing................ The Offering is conditioned upon the simultaneous
consummation of the acquisition of the OMI Chemical
Carriers and the Seal Fleet Vessels (as defined and
described in "Business--The Acquisitions").
Nasdaq National Market Symbol........ HMAR
</TABLE>

- -----------------------

(1) Excludes 835,000 shares of Class A Common Stock reserved for issuance upon
exercise of options to be granted prior to or shortly after completion of
the Offering and includes (i) 55,500 shares of Class A Common Stock to be
issued following the Offering in exchange for a portion of the principal of
the Junior Notes (as defined herein) remaining outstanding upon consummation
of the Offering (see "Use of Proceeds" and "The Company"), (ii) 100,358
shares of Class A Common Stock to be issued in payment for services, and
(iii) 25,667 shares of Class A Common Stock to be issued in exchange for
certain outstanding indebtedness upon consummation of the Offering. See
"Management--Equity Ownership Plans," "Certain Transactions," and
"Description of Capital Stock--Recapitalization Agreement."

(2) Includes 1,188,502 shares of Class B Common Stock to be issued following the
Offering in exchange for the remainder of the principal remaining
outstanding on the Junior Notes. The Class B Common Stock is held entirely
by members of the Hvide Family and the Investor Group. See "Security
Ownership of Principal Stockholders and Management," "Description of Certain
Indebtedness--Acquisition Notes and Assumed Debt," and "Description of
Capital Stock--Recapitalization Agreement."

5
<PAGE>
SUMMARY CONSOLIDATED HISTORICAL AND
PRO FORMA FINANCIAL AND OPERATING DATA

The summary consolidated financial data presented below should be read in
conjunction with the consolidated financial statements and notes thereto of the
Company, the financial statements and notes thereto of the OMI Chemical Carrier
Group (the "OMI Chemical Carriers"), the Seal Fleet Vessels (as defined herein),
and Gulf Boat Marine Services, Inc. and E&D Boat Rentals, Inc. (together,
"GBMS"), "Selected Historical and Pro Forma Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and "Pro Forma Condensed Consolidated Financial Statements"
included elsewhere in this Prospectus. The summary unaudited pro forma statement
of operations data for the year ended December 31, 1995 and the three months
ended March 31, 1996 give effect to the pending acquisitions of the OMI Chemical
Carriers and the Seal Fleet Vessels, the acquisition of eight crew boats from
GBMS in January 1996, the acquisition of one vessel in February 1996, the
Offering, the repayment of certain indebtedness, and the conversion of the
Junior Notes into shares of Common Stock as if all such transactions had
occurred on January 1, 1995 and January 1, 1996, respectively. The summary
unaudited pro forma balance sheet and vessel data give effect to the foregoing
transactions, except for the vessels acquired in January and February 1996, and
to the acquisition of four additional vessels (which are part of the
Acquisitions) as if all such transactions had occurred on March 31, 1996. Such
pro forma data are presented for illustrative purposes only and do not purport
to represent what the Company's results actually would have been if such events
had occurred at the dates indicated, nor do such data purport to project the
financial position or results of operations for any future period or as of any
future date. The results for the three months ended March 31, 1996 are not
necessarily indicative of the results to be expected for the full year.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- ------------------------------
PRO FORMA PRO FORMA
1993 1994 1995 1995 1995 1996 1996
(IN THOUSANDS, EXCEPT PER SHARE, VESSEL, AND OPERATING DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue............................... $41,527 $49,792 $70,562 $ 122,985 $15,780 $20,211 $32,332
Income from operations................ 6,584 5,838 11,072 18,925 2,318 2,705 5,061
Interest expense, net................. 3,412 5,302 11,460 12,312 2,716 2,882 2,885
Income (loss) before provision for
income taxes and cumulative effect
of a change in accounting
principle.............................. 3,691 547 (362) 6,803 (609) -- 2,353
Income (loss) before cumulative effect
of a change in accounting
principle.............................. 1,818 358 (360) 4,354 (609) (35) 1,506
Cumulative effect of a change in
accounting principle................ 1,491 -- -- -- -- -- --
Net income (loss)..................... 3,309 358 (360) 4,354 (609) (35) 1,506
------- ------- ------- --------- ------- ------- ---------
------- ------- ------- --------- ------- ------- ---------
EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) before cumulative effect
of a change in accounting
principle(1)........................... $ 0.26 $ 0.03 $ (0.14) $ 0.40 $ (0.24) $ (0.01) $ 0.14
Net income (loss)(1).................. 0.50 0.03 (0.14) 0.40 (0.24) (0.01) 0.14
------- ------- ------- --------- ------- ------- ---------
------- ------- ------- --------- ------- ------- ---------
Weighted average number of common
shares and common share equivalents
outstanding(2)......................... 6,268 5,302 2,535 10,905 2,535 2,535 10,905
------- ------- ------- --------- ------- ------- ---------
------- ------- ------- --------- ------- ------- ---------
OTHER FINANCIAL DATA:
EBITDA(3)............................. $11,319 $10,338 $17,380 $ 31,655 $ 3,797 $ 4,382 $ 8,341
------- ------- ------- --------- ------- ------- ---------
------- ------- ------- --------- ------- ------- ---------
NET CASH PROVIDED BY (USED IN):
Operating activities.................. $ 6,956 $ 2,858 $ 3,948 $ 3,204 $ 4,164
Investing activities.................. (2,247) (39,815) (8,066) (3,419) (2,464)
Financing activities.................. (6,158) 41,249 805 (1,435) 1,263
VESSEL DATA (AT END OF PERIOD):
Marine Support Services
Supply boats.......................... 10 14 14 14 14 24
Crew boats(4)......................... -- 21 28 28 37 39
Tugs.................................. 10 10 11 10 11 11
Marine Transportation Services
Chemical carriers................... 2 2 2 2 2 5
Product carriers.................... 1 1 1 1 1 1
Towboats and barges................. -- 18 23 18 23 23
------- ------- ------- ------- ------- ---------
Total............................. 23 66 79 73 88 103
------- ------- ------- ------- ------- ---------
------- ------- ------- ------- ------- ---------
</TABLE>

6
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------- ------------------
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Supply boats:
Average vessel day rates(5)........................... $ 2,696 $ 3,195 $ 3,023 $ 2,888 $ 3,468
Average vessel utilization rates(6)................... 98% 84% 81% 71% 92%
Crew boats:
Average vessel day rates(5)........................... -- $ 1,421 $ 1,434 $ 1,444 $ 1,469
Average vessel utilization rates(6)................... -- 88% 85% 79% 89%
Tugs:
Total offshore and ship docking tug revenue
(in thousands)...................................... $10,585 $11,140 $12,582 $ 2,887 $ 3,625
Total ship docking tug jobs........................... 8,178 8,740 9,233 2,232 2,458
Chemical and product carriers:
Time charter equivalents(7)........................... $24,765 $24,898 $26,034 $25,459 $25,532
</TABLE>

<TABLE>
<CAPTION>
AT MARCH 31, 1996
---------------------
ACTUAL PRO FORMA
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)................................................ $ 448 $ (3,740)
Total assets............................................................. 154,020 254,406
Total debt............................................................... 115,778 137,782
Stockholders' and minority partners' equity.............................. 13,798 95,564
</TABLE>

- -----------------------
(1) For the purpose of calculating earnings per share for the years 1993 and
1994, historical income available to common stockholders has been reduced
for dividends on Class A Preferred Stock of $203,000 and $222,000,
respectively. The Class A Preferred Stock was redeemed on September 30,
1994. See "Certain Transactions."

(2) For the years 1993 and 1994, the weighted average number of common shares
and common share equivalents assumes the conversion of the Class B Preferred
Stock into shares of Common Stock. The Class B Preferred Stock was redeemed
on September 30, 1994. Pro forma shares reflect the weighted average number
of common shares giving effect to the issuance of 7,000,000 shares of Class
A Common Stock in the Offering, 100,358 shares of Class A Common Stock in
payment of services, 25,667 shares of Class A Common Stock in exchange for
certain outstanding indebtedness, 55,500 shares of Class A Common Stock and
1,188,502 shares of Class B Common Stock in exchange for the principal
amount of the Junior Notes remaining outstanding after the application of
the proceeds of the Offering and exclude 835,000 shares of Class A Common
Stock reserved for issuance upon exercise of options to be granted prior to
or shortly after the consummation of the Offering. See "Management--Equity
Ownership Plans," "Certain Transactions," and "Description of Certain
Indebtedness-- Acquisition Notes and Assumed Debt."

(3) EBITDA (net income from continuing operations before interest expense,
income tax expense, depreciation expense, amortization expense, minority
interests, and other non-operating income) is frequently used by securities
analysts and is presented here to provide additional information about the
Company's operations. EBITDA is not required by generally accepted
accounting principles and should not be considered as an alternative to net
income as an indicator of the Company's operating performance or as an
alternative to cash flows from operations as a measure of liquidity.
(4) For the years 1994, 1995, and pro forma 1995, and the three months ended
March 31, 1995 and 1996 and pro forma three months ended March 31, 1996, the
number of crew boats includes two utility boats.
(5) Average day rates are calculated by dividing total vessel revenue by the
total number of vessel days utilized.
(6) Utilization rates are average rates based on a 365-day year. Vessels are
considered utilized when they are generating charter revenue.
(7) Time charter equivalents are calculated by deducting total voyage expenses
from total voyage revenue and dividing the result by the total days per
voyage.

7
<PAGE>

RECENT DEVELOPMENTS

The Company's preliminary estimates of results for the quarter ended June
30, 1996 reflect revenue, income from operations, net income (loss), and EBITDA
of $21.5 million, $3.1 million, $0.3 million, and $4.8 million, respectively,
compared with results for the quarter ended March 31, 1996 of $20.2 million,
$2.7 million, $(35,000), and $4.4 million, respectively. The Company's second
quarter results primarily reflect improvement in its offshore energy support
operations, which experienced an increase in revenue from the first quarter of
approximately $1.5 million due to increased utilization of the Company's supply
and crew boats and increased day rates for its supply boats. Utilization of
supply boats increased to 100% for the second quarter from 92% for the first
quarter, and utilization of crew boats increased to 93% for the second quarter
from 89% for the first quarter. Average day rates for supply boats increased to
$4,080 for the second quarter from $3,468 for the first quarter, while average
day rates for crew boats remained essentially unchanged at approximately $1,466.

The Company's second quarter results also reflect improvement in its
offshore energy support operations as compared with the second quarter of 1995,
due to increased utilization of and day rates for its supply boats and crew
boats. Utilization of supply boats of 100% for the second quarter of 1996
compares with 76% for the second quarter of 1995, and utilization of crew boats
of 93% for the second quarter of 1996 compares with 81% for the second quarter
of 1995. Average day rates for supply boats of $4,080 for the second quarter of
1996 compares with $2,843 for the second quarter of 1995, and average day rates
for crew boats of $1,466 compares with $1,412 for the second quarter of 1995.

RISK FACTORS

In addition to other information contained in this Prospectus, prospective
purchasers of the Class A Common Stock should carefully consider the following
factors in evaluating an investment in the Company.

POTENTIAL LOSS OF JONES ACT PROTECTION

Most of the Company's operations are conducted in the U.S. domestic trade,
which, by virtue of the U.S. coastwise laws (often referred to as the "Jones
Act"), is restricted to vessels built in the United States, owned and crewed by
U.S. citizens, and registered under U.S. law. There have been repeated attempts
to repeal the coastwise laws, and efforts to effect such repeal are underway and
are expected to continue in the future. The Company is already subject to
vigorous competition and potential additional competition in all aspects of its
operations, including competition by companies with financial resources greater
than those of the Company which could be committed to the construction of new
vessels in excess of market requirements. Repeal of the coastwise laws would
result in additional competition from vessels built in lower-cost foreign
shipyards and manned by foreign nationals accepting lower wages than U.S.
citizens and could have a material adverse effect on the Company.

HAZARDOUS ACTIVITIES

The operation of ocean-going vessels carries an inherent risk of
catastrophic marine disasters and property losses caused by adverse weather
conditions, mechanical failures, human error, and other circumstances or events.
In addition, the transportation of petroleum and toxic chemicals is subject to
the risk of spills and environmental damage. Any such event could have a
material adverse effect on the Company. While the Company carries insurance to
protect against most of the accident-related risks involved in the conduct of
its business, including environmental damage and pollution insurance coverage,
there can be no assurance that all risks are adequately insured against, that
any particular claim will be paid, or that the Company will be able to procure
adequate insurance coverage at commercially reasonable rates in the future. In
particular, more stringent environmental regulations may result in increased
costs for, or the lack of availability of, insurance against the risks of
environmental damage or pollution.

CYCLICAL INDUSTRY CONDITIONS

Historically, the marine support and transportation services industry has
been cyclical, with corresponding volatility in profitability and vessel values.
This industry cyclicality has been due to changes in the level of general
economic growth as well as changes in the supply of and demand for

8
<PAGE>
vessel capacity, which impact charter rates and vessel values. The supply of
vessels is influenced by the numbers of vessels constructed and retired and by
government and industry regulation of maritime transportation practices. The
Company's offshore energy support services and offshore and harbor towing
services are dependent upon the levels of activity in offshore oil and natural
gas exploration, development, and production. Such activity levels are affected
by both short- and long-term trends in world oil and natural gas prices.
Utilization of the Company's towboat and fuel barge fleet is also partly
dependent on such prices as well as energy utilization, which is partly a
function of the weather. In recent years, oil and natural gas prices, and
therefore the level of offshore drilling and exploration activity, have been
extremely volatile. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Any future prolonged decline in natural
gas or oil prices will, in all likelihood, depress the level of offshore
exploration and development activity and result in a corresponding decline in
the demand for the services provided by the Company's offshore energy support
vessels, and any sustained reduction in such activity could have a material
adverse effect on the Company. See "Business--The Industry--Marine Support
Services--Offshore Energy Support." In addition, marine support and
transportation services are dependent on general economic conditions. Any
general economic slowdown could have an adverse effect on the level of the
provision of those services and therefore upon the Company.

ENVIRONMENTAL RISK AND REGULATIONS

Current laws and regulations could impose substantial liability on the
Company for damages, remediation costs, and penalties associated with oil or
hazardous-substance spills or other discharge into the environment involving the
Company's vessel operations. Shoreside industrial operations, including a small
marine maintenance and drydocking facility owned and operated by the Company,
are also subject to federal, state, and local environmental laws and
regulations. Amendment of these laws and regulations to impose more stringent
requirements would likely result in increased maintenance and operating
expenses. In addition, OPA 90 requires tanker owners and operators to establish
and maintain with the U.S. Coast Guard evidence of financial responsibility, as
demonstrated by a certificate of financial responsibility ("COFR"), with respect
to potential oil spill liability, which the Company and most of its competitors
currently satisfy by virtue of self-insurance or third-party insurance.
Additional laws and regulations may be adopted that could limit the ability of
the Company to do business or increase the cost of its doing business and could
have a material adverse effect on its operations. See "Business--Environmental
and Other Regulation."

HIGH LEVERAGE AND DEBT SERVICE; CERTAIN RESTRICTIONS ON CAPITAL EXPENDITURES

Upon completion of the Offering, the Company will continue to have
substantial indebtedness. Giving pro forma effect to the Offering and the
Acquisitions, the Company's total outstanding indebtedness would have been
$137.8 million as of March 31, 1996. In addition, the Company has a minority
interest, and options to acquire a majority interest, in five vessels currently
under construction that are being financed, in substantial part, with
non-recourse indebtedness. See "Business--Company Operations--Marine
Transportation Services--Petroleum Product Transportation." Such leverage poses
certain risks for the Company, including the risks that the Company may not
generate sufficient cash flow to service its indebtedness; that the Company will
be unable to renegotiate the terms of its indebtedness; that it may be unable to
obtain additional financing in the future; that, to the extent it is
significantly more leveraged than its competitors, it may be placed at a
competitive disadvantage; and that the Company's capacity to respond to market
conditions and other factors may be adversely affected. The Company's ability to
service its debt will depend on its future performance, which will be subject to
prevailing economic and competitive conditions and other specific factors
discussed herein, as well as developments in capital markets generally.

The terms of certain of the Company's indebtedness (i) require the Company
to maintain minimum levels of working capital and net worth and to meet
specified financial ratios, (ii) limit the issuance of debt by the Company and
of debt or preferred stock by the Company's subsidiaries, (iii) restrict the
ability of its subsidiaries to pay dividends or make distributions to the
Company, (iv) restrict the Company's ability to pay dividends, redeem capital
stock or subordinated debt, make certain investments or issue capital stock,
place additional liens on its or its subsidiaries' property, incur additional
long-term indebtedness, make capital expenditures in excess of specified
limitations, and enter into mergers or similar transactions, (v) limit certain
corporate acts and transactions by the Company, and (vi) provide that upon a
Change in Control (as defined), holders of the Senior Notes have

9
<PAGE>

the right to require the Company to repurchase such indebtedness. In addition,
the amount available under the Company's vessel acquisition line of credit will
be reduced dollar-for-dollar to the extent that gross proceeds from the
Offering, including proceeds from the exercise of the Underwriters' over-
allotment option, if any, are less than $91.0 million. Such provisions could
adversely affect the Company's ability to pursue its strategy of growth through
acquisitions. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Financial Resources" and "Description
of Certain Indebtedness--Bank Debt."

MANDATED REMOVAL OF VESSELS FROM JONES ACT TRADE

OPA 90 establishes a phase-out schedule for single-hull vessels carrying
crude oil and petroleum products which, in the case of the Company's product
carrier (Seabulk Challenger) and two chemical carriers (Seabulk Magnachem and
Seabulk America), are the years 2003, 2007, and 2015, respectively; in the case
of its fuel barges is the year 2015; and in the case of the three OMI Chemical
Carriers (OMI Hudson, OMI Dynachem, and OMI Star) are the years 2011, 2011, and
2000, respectively. As a result of this requirement, these vessels will be
prohibited from transporting petroleum products in U.S. waters after their
respective phase-out dates. There can be no assurance that future tanker market
rates will be sufficient to support construction of replacement vessels.
Although the Company's remaining vessels are not subject to mandatory
retirement, and the Company employs what it believes to be a rigorous
maintenance program for all its vessels, there can be no assurance that the
Company will be able to maintain its fleet by extending the economic lives of
existing vessels or acquiring new or used vessels. See "Business--Company
Operations--Marine Transportation Services" and "--Environmental and Other
Regulation."

RELIANCE ON SIGNIFICANT CUSTOMERS

Shell, the Company's largest single customer and the long-term charterer of
the Company's product carrier, accounted for between 10% and 15% of the
Company's 1995 revenues (less than 10% on a pro forma basis assuming the
Acquisitions had occurred on January 1, 1995). Florida Power & Light Company
("FPL"), the Company's second largest customer, accounted for between 5% and 10%
of the Company's 1995 revenues (less than 5% on a pro forma basis assuming the
Acquisitions had occurred on January 1, 1995). The loss of either of these
customers could have a material adverse effect on the Company. See
"Business--Company Operations--Customers and Charter Terms."

RISK OF LOSS AND INSURANCE

The business of the Company is affected by a number of risks, including the
mechanical failure of its vessels, collisions, vessel loss or damage, cargo loss
or damage, hostilities, and labor strikes. In addition, the operation of any
vessel is subject to the inherent possibility of a catastrophic marine disaster,
including oil, fuel, or chemical spills and other environmental mishaps, as well
as other liabilities arising from owning and operating vessels. Any such event
may result in loss of revenues and increased costs and other liabilities.
Although the Company's losses from such hazards have not historically exceeded
its insurance coverage, there can be no assurance that this will continue to be
the case.

OPA 90, by imposing virtually unlimited liability upon vessel owners,
operators, and certain charterers for certain oil pollution accidents in the
United States, has made liability insurance more expensive and has also prompted
insurers to consider reducing available liability coverage. See
"Business--Environmental and Other Regulation." While the Company maintains
insurance, there can be no assurance that all risks are adequately insured
against particularly in light of the virtually unlimited liability imposed by
OPA 90, that any particular claim will be paid, or that the Company will be able
to procure adequate insurance coverage at commercially reasonable rates in the
future. Because it maintains mutual insurance, the Company is subject to funding
requirements and coverage shortfalls in the event claims exceed available funds
and reinsurance and to premium increases based on prior loss experience. Any
such shortfalls could have a material adverse impact on the Company.

RESTRICTION ON FOREIGN OWNERSHIP

In order to maintain the eligibility of the Company's vessels to be operated
in the U.S. domestic trade, 75% of the outstanding capital stock and voting
power of the Company is required to be held by

10
<PAGE>
U.S. citizens. See "Business--Environmental and Other Regulation." Although the
Company's Articles of Incorporation contain provisions limiting non-citizen
ownership of its capital stock (see "Description of Capital Stock--Foreign
Ownership Restrictions"), the Company could lose its ability to conduct
operations in the U.S. domestic trade if such provisions prove unsuccessful in
maintaining the required level of citizen ownership. Such loss would have a
material adverse effect on the Company.

ACQUISITION STRATEGY

One element of the Company's strategy is to continue to grow through
selected acquisitions that further consolidate the marine support and
transportation markets in which the Company operates. There can be no assurance
that the Acquisitions or any additional acquisitions will be successful in
enhancing the operations or profitability of the Company; that the Company will
be able to identify suitable additional acquisition candidates; that it will
have the financial ability to consummate additional acquisitions; or that it
will be able to consummate such additional acquisitions on terms favorable to
the Company. The amount available under the Company's vessel acquisition line of
credit will be reduced dollar-for-dollar to the extent that gross proceeds from
the Offering, including proceeds from the exercise of the Underwriters'
over-allotment option, if any, are less than $91.0 million. Such provisions
could adversely affect the Company's ability to pursue its strategy of growth
through acquisitions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Financial Resources" and
"Description of Certain Indebtedness--Bank Debt."

LEGAL PROCEEDINGS

The Company's chemical carrier Seabulk America is the subject of two pending
legal proceedings, one involving the eligibility of the vessel to operate in the
U.S. domestic trade and the other involving the cost of its completion, either
of which, if determined adversely to the Company, could have a material adverse
effect on the Company. In addition, although the Federal Trade Commission
("FTC") granted early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), with respect to the Company's proposed acquisition of the OMI Chemical
Carriers, by letter dated June 26, 1996, a shipper of chemicals advised the FTC
and the Department of Justice ("DOJ") that it opposed the acquisition and urged
their inquiry into the acquisition. Accordingly, although the Company believes
that neither the FTC nor the DOJ will initiate any formal action with respect to
such acquisition by the Company, there can be no assurance that the FTC or the
DOJ will not file suit pursuant to the federal antitrust laws to enjoin the
consummation of the acquisition or to seek divestiture of one or more of the OMI
Chemical Carriers by the Company following the consummation of the acquisition.
Any such divestiture, if required, could have a material adverse effect on the
Company. See "Business--Legal Proceedings."

INTERNATIONAL MARINE OPERATIONS

The Company currently operates two offshore supply boats in Southeast Asia,
and of the supply boats to be acquired in the Acquisitions, two will be operated
in the North Sea and one in Southeast Asia. Such operations are subject to risks
inherent in conducting business in foreign countries, including political
changes, possible vessel seizure and asset nationalization, or other government
actions, all of which are beyond the control of the Company and the occurrence
of any of which could have a material adverse affect on the Company.

KEY PERSONNEL

The Company is materially dependent upon the continued services of key
members of its management, including its Chairman, President, and Chief
Executive Officer, J. Erik Hvide. The loss of one or more key members of
management could have a material adverse effect on the Company. See
"Management."

NO PRIOR MARKET FOR CLASS A COMMON STOCK

Prior to the Offering, there has been no public market for the Class A
Common Stock or any other securities of the Company. The initial public offering
price for the shares of Class A Common Stock has been determined through
negotiations between the Company and the Representatives of the Underwriters.
See "Underwriting." Although the Class A Common Stock has been approved for
listing on the

11
<PAGE>
Nasdaq National Market, there can be no assurance that an active trading market
will develop or be sustained or that investors in shares of the Class A Common
Stock will be able to resell their shares at or above the initial public
offering price, if at all.

CONTROL BY CURRENT STOCKHOLDERS; SHAREHOLDERS AGREEMENT; RESTRICTIONS ON
CORPORATE ACTIONS; ANTI-TAKEOVER EFFECT OF DUAL CLASSES OF STOCK AND CERTAIN
OTHER PROVISIONS

The Company's Common Stock is divided into Class A Common Stock, of which
each share is entitled to one vote with respect to all matters submitted to
stockholder vote, and Class B Common Stock, of which each share is entitled to
ten votes with respect to such matters. Upon completion of the Offering, J. Erik
Hvide and the Hvide Trusts will beneficially own 1,769,107 shares of Class B
Common Stock, and the Investor Group will beneficially own 359,266 shares of
Class A Common Stock and 1,650,470 shares of Class B Common Stock. Upon
completion of the Offering, Mr. Hvide (together with the Hvide Trusts) and the
Investor Group will therefore own shares that will represent 16.2% and 18.4%,
respectively, of the outstanding shares of Common Stock (14.8% and 16.8%,
respectively, if the Underwriters' over-allotment option is exercised in full)
and 42.4% and 40.5%, respectively, of the voting power of all Common Stock
(41.4% and 39.5%, respectively, if the Underwriters' over-allotment option is
exercised in full). See "Use of Proceeds," "The Company," and "Description of
Capital Stock--Recapitalization Agreement." Accordingly, Mr. Hvide and the
Investor Group will be able to elect a majority of the Company's directors and
to determine the disposition of all matters submitted to a vote of the Company's
stockholders. In addition, Mr. Hvide and the Investor Group have entered into an
agreement giving them the right to nominate eight and three persons,
respectively, to the Company's 11-member Board of Directors. Each share of Class
B Common Stock is convertible by its holder into one share of Class A Common
Stock at any time, and automatically converts into Class A Common Stock
following the Offering if held by persons other than the Hvide Family and
members of the Investor Group. See "Management," "Security Ownership of
Principal Stockholders and Management," and "Description of Capital
Stock--Shareholders Agreement." Pursuant to certain agreements, Mr. Hvide and
the Hvide Trusts will be required to transfer shares of Common Stock to the
Company upon its issuance of shares of Common Stock to the Investor Group 300
days after the date of this Prospectus. See "Description of Capital
Stock--Contingent Share Issuance Agreement." In addition, so long as the
Investor Group owns specified percentages of the outstanding Class B Common
Stock, certain significant transactions will require the approval of 95%, and
the appointment of a new chief executive officer will require approval of 75%,
of the holders of the Class B Common Stock. See "Description of Capital
Stock--Certain Provisions of Articles of Incorporation and Bylaws."

Such control by Mr. Hvide and the Investor Group may also have the effect of
discouraging certain types of transactions involving an actual or potential
change of control of the Company, including transactions in which the holders of
Class A Common Stock might otherwise receive a premium for their shares over
then-current market prices. In addition, pursuant to the Company's Articles of
Incorporation, the Board of Directors is divided into three classes of directors
serving staggered three-year terms and, consequently, it would likely require
two annual meetings rather than one for the stockholders to replace a majority
of the Board of Directors.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Class A Common Stock in the public market
following the Offering, or the perception that such sales may occur, could have
an adverse effect on the market price of the stock. Subject to an agreement that
restricts their sale without the prior approval of the Representatives of the
Underwriters for 180 days following the date of this Prospectus, all 1,769,107
of the shares of Class B Common Stock owned by Mr. Hvide will be eligible for
public sale (Class B Common Stock is freely convertible, share for share, into
Class A Common Stock), subject to volume and other limitations of Rule 144 under
the Securities Act of 1933, as amended (the "Securities Act"). Subject to a
365-day lock-up, 2,009,736 shares of Common Stock owned by the Investor Group
will be eligible for public sale under Rule 144 or through the exercise of
demand registration rights. Pursuant to the Shareholders Agreement and CSI
Agreement (each as defined herein) Mr. Hvide and the Hvide Trusts will be
required to transfer shares of Common Stock to the Company upon its issuance of
shares of Common Stock to the Investor Group 300 days after the date of this
Prospectus. Such shares may become eligible for public sale under Rule 144. The
Company has granted the Investor Group certain registration rights under the
Securities Act with respect to the Common Stock owned by them. Prior to or
shortly after the consummation of the Offering, certain directors, officers, and
employees of the

12
<PAGE>
Company will be granted options to purchase 835,000, shares of Class A Common
Stock at an exercise price equal to the offering price of the shares offered
hereby. The shares acquired upon exercise of these options will also be eligible
for public sale subject to Rule 144 under the Securities Act. See "Shares
Eligible for Future Sale." Moreover, the Company may issue shares of Common
Stock in connection with future acquisitions. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources," "Business--Strategy," and "Description of Capital
Stock--Shareholders Agreement" and "--Contingent Share Issuance Agreement."

FORWARD-LOOKING INFORMATION

The Prospectus Summary, the "Strategy" and "The Industry" sections of
"Business," and the "Cyclical Industry Conditions," "Mandated Removal of Vessels
from Jones Act Trade," and "Acquisition Strategy" paragraphs of "Risk Factors"
contain one or more forward-looking statements or statements based upon the
Company's beliefs, by which the Company attempts to measure activity in, and to
analyze the factors affecting, the markets for its services. There can be no
assurance that (i) the Company has correctly measured or identified all of the
factors affecting these markets or the extent of their likely impact, (ii) the
publicly available information with respect to these factors on which the
Company's analysis is based is complete or accurate, (iii) the Company's
analysis is correct, or (iv) the Company's strategy, which is based in part on
this analysis, will be successful.

13
<PAGE>

THE COMPANY

Hvide Marine Incorporated was incorporated in the state of Florida in 1994
as Hvide Corp., the holding company for its principal operating subsidiary.
Immediately prior to the closing of the Offering, the principal operating
subsidiary will be merged with and into Hvide Corp. and Hvide Corp., the
surviving entity, will be renamed Hvide Marine Incorporated. The Company's
principal operating subsidiary began operations in 1958 as a harbor tug operator
and in 1975 acquired its first petroleum product carrier. It began transporting
specialty chemicals in 1977 and expanded into the operation of offshore energy
support vessels with the acquisition of eight supply boats in 1989.

In 1994, the Company substantially expanded its fleet, adding 20 crew boats,
six supply boats, and two utility boats to its offshore energy support fleet and
an 18-vessel tug and barge fleet to its petroleum product transportation
operations. This expansion also included the acquisition of the remaining
minority interests in certain vessels that were majority owned by the Company,
and the redemption of preferred stock held by the Company's founder.

The 1994 expansion was financed primarily through borrowings under the
Credit Facility (as defined herein) and the issuance to the Investor Group of
$25.0 million aggregate principal amount of senior subordinated notes (the
"Senior Notes") and $25.0 million aggregate principal amount of junior
subordinated notes (the "Junior Notes") at discounts, resulting in aggregate
proceeds to the Company of approximately $40.6 million. In connection with the
issuance of the Junior Notes, the Company issued to members of the Investor
Group, for aggregate consideration of $9.4 million, 452,518 shares of Class B
Common Stock and 313,215 shares of Class C Common Stock, and agreed to issue to
them up to 554,496 additional shares of Common Stock (to be contributed to the
Company by J. Erik Hvide and the Hvide Trusts) to the extent necessary to earn a
specified return on their investment. In addition, J. Erik Hvide (together with
the Hvide Trusts) and the Investor Group are entering into an agreement,
replacing a similar agreement entered into in 1994, granting them certain voting
and approval rights, including the right to nominate eight and three members,
respectively, of the Company's 11-member Board of Directors. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," "Certain Transactions,"
"Description of Certain Indebtedness," "Description of Capital
Stock--Shareholders Agreement," and "--Contingent Share Issuance Agreement."

Since September 1994, the Company has continued to grow through strategic
acquisitions. In addition, the Company has entered into purchase agreements with
five different sellers to acquire title to an aggregate of 15 vessels. The
purchase of these vessels, which constitute the Acquisitions, will be funded
with a combination of (i) a portion of the proceeds from the Offering, (ii)
general corporate funds, and (iii) the assumption or issuance of debt and lease
obligations. See "Use of Proceeds" and "Business--The Acquisitions."

Immediately prior to the Offering, 74,704 shares of the 452,518 shares of
Class B Common Stock owned by the Investor Group will be converted into 74,704
shares of Class A Common Stock, the 313,215 shares of Class C Common Stock owned
by the Investor Group will be converted into 229,062 shares of Class A Common
Stock and 84,153 shares of Class B Common Stock, and the 663,415 shares of Class
C Common Stock owned by the Hvide Family will be converted into 663,415 shares
of Class B Common Stock. In addition, $13.9 million of principal of the Junior
Notes remaining outstanding after application of a portion of the proceeds from
the Offering will be converted into 1,188,502 shares of Class B Common Stock and
55,500 shares of Class A Common Stock within 30 days after the consummation of
the Offering if the Underwriters' over-allotment option is not exercised,
100,358 shares of Class A Common Stock will be issued in payment for services,
and $308,000 of outstanding principal and accrued interest of certain other
indebtedness will be converted into 25,667 shares of Class A Common Stock upon
or following consummation of the Offering. To the extent that the Underwriters'
over-allotment option is exercised, the net proceeds thereof will be used to
repay an equal principal

14
<PAGE>
amount of the remaining $11.5 million of outstanding Senior Notes and interest
thereon. The outstanding principal amount of the Junior Notes and accrued
interest thereon will be exchanged for 55,500 shares of Class A Common Stock and
1,188,502 shares of Class B Common Stock. See "Description of Certain
Indebtedness" and "Description of Capital Stock--Recapitalization Agreement."

The Company's principal office is located at 2200 Eller Drive, Fort
Lauderdale, Florida 33316, and its telephone number is (954) 523-2200.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Class A Common Stock
offered hereby, after deducting underwriting discounts and commissions and
estimated offering expenses, are approximately $75.9 million. Of such net
proceeds, (i) approximately $35.6 million will be used to fund part of the cash
portion of the aggregate purchase price of the Acquisitions and (ii)
approximately $40.3 million will be used to repay certain outstanding
indebtedness as described below. The aggregate purchase price of the
Acquisitions is $99.7 million, of which $37.7 million is payable in cash. The
Offering is conditioned upon the simultaneous consummation of the acquisition of
the OMI Chemical Carriers and the Seal Fleet Vessels. See "Business--The
Acquisitions."

Of the $40.3 million to be used to repay outstanding indebtedness, (i) $14.1
million will be used to repay $0.6 million of accrued interest on and $13.5
million of principal of the Senior Notes, which mature in two equal installments
in September 2003 and 2004 and bear interest at the rate of 12% per annum; (ii)
$15.1 million will be used to repay accrued interest on and a portion of the
principal amount of Junior Notes, which mature in September 2014 and bear
interest at the rate of 8% per annum; (iii) $6.8 million will be used to repay a
portion of the revolving line of credit under the Credit Facility, which line is
due in March 1997 and bears interest at a fluctuating rate (8.2% per annum on
March 31, 1996); (iv) $2.4 million will be applied to reduce the remaining $2.4
million principal amount of the Vessel Acquisition Note (as defined herein),
which bears interest at the lesser of 10% per annum or prime plus 2% (10% per
annum at March 31, 1996); (v) $1.6 million will be applied to reduce the $3.6
million principal amount of the Founder's Note (as defined herein), which is due
in 2000 and bears interest at the greater of 12% per annum or prime plus 3% (12%
per annum at March 31, 1996); and (vi) $0.3 million will be applied to reduce
the $2.1 million aggregate principal amount of the HOS Notes and the HCL Notes
(each as defined herein), which notes are due in full in 2004 and bear interest
at a rate of 12% per annum. For additional information concerning the
indebtedness that is being repaid with a portion of the proceeds from the
Offering, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources" and "Description of
Certain Indebtedness."

To the extent that the Underwriters' over-allotment option is exercised, the
net proceeds thereof will be used to repay an equal principal amount of the
remaining $11.5 million of outstanding Senior Notes and interest thereon.

Pending the use of proceeds as described above, the Company intends to
invest such proceeds in short-term, interest-bearing, investment-grade
securities.

DIVIDEND POLICY

The Company has not paid any cash dividends on its Common Stock since its
formation. It presently intends to retain its earnings for use in its business
and therefore does not anticipate paying any cash dividends in the foreseeable
future. The payment of any future dividends will be determined by the Board of
Directors in light of conditions then existing, including the Company's
earnings, financial condition and requirements, restrictions in financing
agreements, business conditions, and other factors.

15
<PAGE>
The Company's ability to pay dividends also is dependent upon the earnings of
its subsidiaries and the distribution of those earnings to the Company and loans
or advances by the subsidiaries to the Company. The ability of the subsidiaries
to pay dividends or to make distributions is restricted by the terms of the
Credit Facility. Due to such restrictions, the Company is not expected to have
access to the cash flow generated by the subsidiaries for the foreseeable
future. In addition, the Company's ability to pay dividends or make
distributions to its stockholders is also restricted by the terms of the Credit
Facility. See "Description of Certain Indebtedness--Bank Debt."

DILUTION

After giving effect to the Acquisitions and to the sale of the shares of
Class A Common Stock offered hereby and the application of the estimated net
proceeds therefrom as described in "Use of Proceeds," the pro forma net tangible
book value of the Company as of March 31, 1996 would have been approximately
$85.1 million, or $7.80 per share of Common Stock. This represents an immediate
increase in pro forma net tangible book value of $6.49 per share to existing
stockholders and an immediate dilution in pro forma net tangible book value per
share of Common Stock of $4.20 after completion of the Offering from the per
share price paid by purchasers of Class A Common Stock in the Offering. The
following table illustrates this per share dilution:

<TABLE>
<CAPTION>
<S> <C> <C>
Initial public offering price............................................... $12.00
Net tangible book value per share before the Offering....................... $1.31
Increase in net tangible book value attributable to new investors........... 6.49
-----
Pro forma net tangible book value after giving effect to the
Offering(1)................................................................. 7.80
------
Dilution per share to new investors......................................... $ 4.20
------
------
</TABLE>

The following table summarizes, on a pro forma basis as of March 31, 1996,
the total shares purchased and the total consideration and average price per
share paid by existing stockholders and paid by the new investors purchasing the
shares offered hereby.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
New investors........................... 7,000,000 64% $ 84,000,000 81% $ 12.00
Existing stockholders................... 3,904,868 36 19,383,579 19 4.96
---------- ------- ------------ -------
Total................................... 10,904,868 100% $103,383,579 100%
---------- ------- ------------ -------
---------- ------- ------------ -------
</TABLE>

- -----------------------

(1) Excludes 835,000 shares of Class A Common Stock reserved for issuance upon
exercise of options to be granted prior to or shortly after the consummation
of the Offering and includes 100,358 shares of Class A Common Stock to be
issued in payment for services, 25,667 shares of Class A Common Stock to be
issued in exchange for certain outstanding indebtedness, and 55,500 shares
of Class A Common Stock and 1,188,502 shares of Class B Common Stock to be
issued following the Offering in exchange for the principal amount of the
Junior Notes remaining outstanding after application of the proceeds of the
Offering. See "Use of Proceeds," "The Company," "Management--Equity
Ownership Plans," "Certain Transactions," "Description of Certain
Indebtedness--Acquisition Notes and Assumed Debt," and "Description of
Capital Stock-- Recapitalization Agreement."

16
<PAGE>
CAPITALIZATION

The following table sets forth the actual consolidated capitalization of the
Company as of March 31, 1996 and as adjusted to give effect to the Offering and
the application of the net proceeds therefrom, the Acquisitions, the conversion
of the outstanding principal of the Junior Notes into shares of Class A Common
Stock and Class B Common Stock following application of the net proceeds, the
exchange of certain other indebtedness for shares of Class A Common Stock, and
the exchange of all shares of Class C Common Stock for Class A Common Stock and
Class B Common Stock. The information presented below should be read in
conjunction with the Company's consolidated financial statements and the Pro
Forma Condensed Consolidated Financial Statements included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
-----------------------
ACTUAL AS ADJUSTED
(DOLLARS IN THOUSANDS)
<S> <C> <C>

Current portion of long-term debt..................................... $ 12,292 $ 18,969
-------- -----------
-------- -----------
Long-term debt (excluding current portion)(1)......................... $103,486 $ 118,813
Minority partners' equity in subsidiaries............................. 1,488 1,488
Stockholders' equity:
Class A Common Stock, par value $0.001; 100,000,000 shares
authorized; none issued and outstanding: 7,485,291 shares to be
issued and outstanding(2)......................................... -- 7
Class B Common Stock, par value $0.001; 5,000,000 shares authorized;
1,558,210 shares issued and outstanding and 3,419,577 shares to be
issued and outstanding(2)............................................. 1 3
Class C Common Stock, par value $0.001; 2,500,000 shares authorized;
976,630 shares issued and outstanding; no shares to be issued and
outstanding(3)........................................................ 1 --
Additional paid-in capital............................................ 6,341 95,623
Retained earnings (accumulated deficit)(4)............................ 5,967 (1,557)
-------- -----------
Total stockholders equity........................................... 12,310 94,076
-------- -----------
Total minority partners' equity in subsidiaries and stockholders'
equity................................................................ 13,798 95,564
-------- -----------
Total capitalization.............................................. $117,284 $ 214,377
-------- -----------
-------- -----------
</TABLE>

- -----------------------

(1) See "Description of Certain Indebtedness" and Note 3 to the Company's
consolidated financial statements for a description of long-term debt.

(2) See "Description of Capital Stock" for a description of the relative rights
of the Class A Common Stock and Class B Common Stock. Shares to be issued
and outstanding exclude 835,000 shares of Class A Common Stock reserved for
issuance upon exercise of options to be granted prior to or shortly after
consummation of the Offering and include 100,358 shares of Class A Common
Stock to be issued in payment for services, 25,667 shares of Class A Common
Stock to be issued in exchange for certain outstanding indebtedness upon
consummation of the Offering, and 55,500 shares of Class A Common Stock and
1,188,502 shares of Class B Common Stock to be issued following the Offering
in exchange for the principal and accrued interest on the Junior Notes
remaining outstanding upon consummation of the Offering. See "Management--
Equity Ownership Plans," "Certain Transactions," "Description of Certain
Indebtedness--Acquisition Notes and Assumed Debt," and "Description of
Capital Stock--Recapitalization Agreement."

(3) The Class C Common Stock outstanding at March 31, 1996 will be exchanged for
Class A Common Stock and Class B Common Stock immediately prior to the
consummation of the Offering on a one-for-one basis. See "The Company."
(4) The adjusted amount reflects an extraordinary loss on the extinguishment of
the Senior Notes, the Junior Notes, and certain other notes. See "Note 2(c)
to Notes to Pro Forma Condensed Consolidated Financial Statements."

17
<PAGE>
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below should be read in
conjunction with the consolidated financial statements and notes thereto of the
Company, the financial statements and notes thereto of the OMI Chemical
Carriers, the Seal Fleet Vessels, and GBMS, "Pro Forma Condensed Consolidated
Financial Statements," "Summary Consolidated Historical and Pro Forma Financial
and Operating Data," and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Prospectus. The
selected unaudited pro forma statement of operations data for the year ended
December 31, 1995 and the three months ended March 31, 1996 give effect to the
pending acquisitions of the OMI Chemical Carriers and the Seal Fleet Vessels,
the acquisition of certain vessels from GBMS in January 1996, the acquisition of
one vessel in February 1996, the Offering, the repayment of certain
indebtedness, and the conversion of the Junior Notes into shares of Common Stock
as if all such transactions had occurred on January 1, 1995 and January 1, 1996,
respectively. The selected unaudited pro forma balance sheet and vessel data
give effect to the foregoing transactions, except for the vessels acquired in
January and February 1996, and to the acquisition of four additional vessels
(which are part of the Acquisitions) as if all such transactions had occurred on
March 31, 1996. Such pro forma data are presented for illustrative purposes only
and do not purport to represent what the Company's results actually would have
been if such events had occurred at the dates indicated, nor do such data
purport to project the financial position or results of operations for any
future period or as of any future date. The results for the three months ended
March 31, 1996 are not necessarily indicative of the results to be expected for
the full year.

<TABLE><CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------------------------------------- -----------------------------
PRO FORMA PRO FORMA
1991 1992 1993 1994 1995 1995 1995 1996 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS
DATA:
Revenue.................... $45,120 $39,639 $41,527 $ 49,792 $ 70,562 $122,985 $ 15,780 $ 20,211 $ 32,332
Operating expenses......... 28,165 24,602 24,032 29,873 40,664 76,311 9,265 12,216 19,810
Overhead expenses.......... 7,150 6,778 6,176 9,581 12,518 15,019 2,718 3,613 4,181
Depreciation and
amortization.............. 3,829 4,106 4,735 4,500 6,308 12,730 1,479 1,677 3,280
------- ------- ------- -------- -------- --------- -------- -------- ---------
Income from operations..... 5,976 4,153 6,584 5,838 11,072 18,925 2,318 2,705 5,061
Interest expense, net...... 5,024 3,993 3,412 5,302 11,460 12,312 2,716 2,882 2,885
Other income (expense)..... 601 8 519 11 26 190 (211) 177 177
------- ------- ------- -------- -------- --------- -------- -------- ---------
Income (loss) before
provision for (benefit
from) income taxes and
cumulative effect of a
change in accounting
principle............... 1,553 168 3,691 547 (362) 6,803 (609) -- 2,353
Provision for (benefit
from) income taxes....... 601 158 1,873 189 (2) 2,449 -- 35 847
------- ------- ------- -------- -------- --------- -------- -------- ---------
Income (loss) before
cumulative effect of a
change in accounting
principle............... 952 10 1,818 358 (360) 4,354 (609) (35) 1,506
Cumulative effect of a
change in accounting
principle............... -- -- 1,491 -- -- -- -- -- --
------- ------- ------- -------- -------- --------- -------- -------- ---------
Net income (loss).......... $ 952 $ 10 $ 3,309 $ 358 $ (360) $ 4,354 $ (609) $ (35) $ 1,506
------- ------- ------- -------- -------- --------- -------- -------- ---------
------- ------- ------- -------- -------- --------- -------- -------- ---------
Earnings (loss) per common
share:
Income (loss) before
cumulative effect of a
change in accounting
principle(1)............. $ 0.14 $ (0.01) $ 0.26 $ 0.03 $ (0.14) $ 0.40 $ (0.24) $ (0.01) $ 0.14
Net income (loss)(1)....... 0.14 (0.01) 0.50 0.03 (0.14) 0.40 (0.24) (0.01) 0.14
Weighted average number of
common shares and common
share equivalents
outstanding (in
thousands)(2)............ 6,268 6,268 6,268 5,302 2,535 10,905 2,535 2,535 10,905
OTHER FINANCIAL DATA:
EBITDA(3).................. $ 9,805 $ 8,259 $11,319 $ 10,338 $ 17,380 $ 31,655 $ 3,797 $ 4,382 $ 8,341
NET CASH PROVIDED BY (USED
IN):
Operating activities....... $ 8,584 $ (930) $ 6,956 $ 2,858 $ 3,948 $ 3,204 $ 4,164
Investing activities....... (3,633) (1,592) (2,247) (39,815) (8,066) (3,419) (2,464)
Financing activities....... 440 (2,473) (6,158) 41,249 805 (1,435) 1,263
BALANCE SHEET DATA: (AT
PERIOD END)
Working capital
(deficit)................... $ 3,330 $ 847 $ 2,640 $ 7,793 $ 4,315 $ 2,788 $ 448 $ (3,740 )
Total assets............... 90,916 83,718 82,373 135,471 143,683 139,637 154,020 254,406
Total debt................. 59,394 57,011 51,273 104,281 109,051 105,894 115,778 137,782
Stockholders' and minority
partners' equity......... 15,755 15,858 19,926 14,903 13,999 14,107 13,798 95,564
</TABLE>

(Footnotes on following page)
18
<PAGE>
- -----------------------

(1) For the purposes of calculating earnings per share for the years 1991, 1992,
1993, and 1994, historical income available to common stockholders has been
reduced for dividends on Class A Preferred Stock of $69,000, $50,000,
$203,000, and $222,000, respectively. The Class A Preferred Stock was
redeemed on September 30, 1994. See "Certain Transactions."

(2) For the years 1991, 1992, 1993, and 1994, the weighted average number of
common shares and common share equivalents assumes the conversion of the
Class B Preferred Stock into shares of Common Stock. The Class B Preferred
Stock was redeemed on September 30, 1994. Pro forma shares reflect the
weighted average number of common shares giving effect to the issuance of
7,000,000 shares of Class A Common Stock in the Offering, 100,358 shares of
Class A Common Stock in payment for services, 25,667 shares in exchange for
certain outstanding indebtedness upon consummation of the Offering, 55,500
shares of Class A Common Stock and 1,188,502 shares of Class B Common Stock
in exchange for the principal and accrued interest on the Junior Notes
remaining outstanding upon completion of the Offering and excludes 835,000
shares of Class A Common Stock reserved for issuance upon exercise of
options to be granted prior to or shortly after the consummation of the
Offering. See "Management--Equity Ownership Plans," "Certain Transactions,"
and "Description of Certain Indebtedness--Acquisition Notes and Assumed
Debt."

19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis of the Company's financial condition and
historical results of operations should be read in conjunction with the
Company's consolidated historical financial statements, the Company's unaudited
pro forma condensed consolidated financial statements, and the financial
statements of the OMI Chemical Carriers, the Seal Fleet Vessels, and the GBMS
vessels and the related notes thereto included elsewhere in this Prospectus.

RECENT AND PENDING ACQUISITIONS

The Company's results of operations have been and will be significantly
affected by a series of acquisitions, aggregating 84 vessels and certain
partnership interests, since September 1994 as summarized in the following
table.

<TABLE>
<CAPTION>
NUMBER OF ASSETS AGGREGATE
PERIOD TRANSACTIONS ACQUIRED INVESTMENT
------- ------------ -------------------- -------------
<S> <C> <C> <C> <C>

Offshore Energy Support............ 1994 5 6 supply boats $19.6 million
20 crew boats
2 utility boats
1995 1 7 crew boats 5.9 million
1996(1) 6 10 supply boats
11 crew boats 40.6 million

Offshore and Harbor Towing......... 1994 1 1 tug $ 1.8 million
1995 1 1 tractor tug 6.4 million(2)

Chemical Transportation............ 1996(1) 1 3 chemical carriers $64.7 million

Petroleum Product Transportation... 1994 1 10 tugs $13.9 million
8 barges
1995 1 5 barges 0.1 million
</TABLE>

- -----------------------

(1) 1996 transactions include the Acquisitions.

(2) The amount reflects the Company's estimate of the cost to build the tractor
tug. The Company operates the tractor tug under an operating lease.

<PAGE>
AREA OF OPERATIONS OVERVIEW

The financial information presented below represents historical results by
major areas of operations. The historical financial data presented below should
be read in conjunction with the Company's consolidated financial statements and
notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------- ------------------
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
Revenue:
Marine support services:
Offshore energy support................. $ 4,518 $11,317 $23,217 $ 4,804 $ 7,367
Offshore and harbor towing.............. 10,585 11,140 12,582 2,887 3,625
------- ------- ------- ------- -------
15,103 22,457 35,799 7,691 10,992
Marine transportation services:
Chemical transportation................. 17,337 16,886 18,632 4,482 4,556
Petroleum product transportation........ 9,087 10,449 16,131 3,607 4,663
------- ------- ------- ------- -------
26,424 27,335 34,763 8,089 9,219
------- ------- ------- ------- -------
Total revenues........................ 41,527 49,792 70,562 15,780 20,211
------- ------- ------- ------- -------
Operating expenses:
Marine support services:
Offshore energy support................. 1,719 7,017 13,335 2,891 4,503
Offshore and harbor towing.............. 5,748 5,568 6,001 1,316 1,815
------- ------- ------- ------- -------
7,467 12,585 19,336 4,207 6,318
Marine transportation services:
Chemical transportation................. 10,678 10,698 11,105 2,703 2,800
Petroleum product transportation........ 5,887 6,590 10,223 2,355 3,098
------- ------- ------- ------- -------
16,565 17,288 21,328 5,058 5,898
------- ------- ------- ------- -------
Total operating expenses.............. 24,032 29,873 40,664 9,265 12,216
------- ------- ------- ------- -------
Fleet operating income before overhead,
depreciation and amortization expenses:
Marine support services:
Offshore energy support................. 2,799 4,300 9,882 1,913 2,864
Offshore and harbor towing.............. 4,837 5,572 6,581 1,571 1,810
------- ------- ------- ------- -------
7,636 9,872 16,463 3,484 4,674
Marine transportation services:
Chemical transportation................. 6,659 6,188 7,527 1,779 1,756
Petroleum product transportation........ 3,200 3,859 5,908 1,252 1,565
------- ------- ------- ------- -------
9,859 10,047 13,435 3,031 3,321
------- ------- ------- ------- -------
Total fleet operating income before
overhead, depreciation and
amortization expenses....................... 17,495 19,919 29,898 6,515 7,995
------- ------- ------- ------- -------

Overhead expenses........................... 6,176 9,581 12,518 2,718 3,613
Depreciation and amortization expense....... 4,735 4,500 6,308 1,479 1,677
------- ------- ------- ------- -------
Income from operations...................... $ 6,584 $ 5,838 $11,072 $ 2,318 $ 2,705
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>

REVENUE OVERVIEW

MARINE SUPPORT SERVICES

Revenue derived from vessels providing marine support services is
attributable to the Company's offshore energy support fleet and its offshore and
harbor towing operations.

21
<PAGE>
Offshore Energy Support. Revenue derived from the Company's offshore energy
support services is primarily a function of the size of the Company's fleet,
vessel day rates or charter rates, and fleet utilization. Rates and utilization
are primarily a function of offshore drilling, production, and construction
activities. Levels of offshore drilling, production, and construction have
increased recently as a result of fundamental changes in the Gulf of Mexico
energy industry, including (i) improvements in exploration technologies, such as
computer-aided exploration and 3-D seismic, that have increased drilling success
rates in the region; (ii) improvements in subsea completion and production
technologies that have led to increased deepwater drilling and development; and
(iii) expansion of the region's production infrastructure that has improved the
economics of developing smaller oil and gas fields. In addition, the short
reserve life characteristics of Gulf of Mexico gas production require continuous
drilling to replace reserves and maintain production. These higher overall
activity levels have led to increased demand for the Company's offshore energy
support services and higher overall vessel utilization and day rates in the Gulf
of Mexico. Crew boats generally have higher utilization rates than supply boats
because, unlike supply boats, which are used primarily in connection with
exploration activities, crew boats are utilized in connection with both
exploration and production activities. Contracts for the utilization of offshore
service vessels commonly include termination provisions with three- to five-day
notice requirements and no termination penalty. As a result, the operations of
companies engaged in the offshore energy service market are particularly
sensitive to market demand. See "Business--The Industry--Marine Support
Services--Offshore Energy Support."

The following table sets forth average day rates achieved by the offshore
supply boats and crew boats owned or operated by the Company in the Gulf of
Mexico and their average utilization for the periods indicated.
<TABLE>
<CAPTION>
1993 1994 1995
--------------------------------- --------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Number of supply
boats at end of
period............ 3 3 3 3 5 7 7 8 10 10 10
Average supply
boat
day rates(1)..... $2,325 $2,400 $2,852 $3,209 $3,433 $3,035 $3,200 $3,060 $2,886 $2,843 $3,113
Average supply
boat
utilization
rates(2).......... 100% 100% 100% 94% 94% 73% 80% 90% 71% 76% 84%
Number of crew
boats at end of
period(3)(4)...... -- -- -- -- -- -- 20 19 26 26 26
Crew boat day
rates(1)(3)....... -- -- -- -- -- -- $1,405 $1,435 $1,444 $1,412 $1,422
Average crew boat
utilization
rates(2)(3)....... -- -- -- -- -- -- 87% 88% 79% 81% 90%

<CAPTION>
1996
------
<S> <C> <C>
Q4 Q1
Number of supply
boats at end of
period............ 10 10
Average supply
boat
day rates(1)..... $3,244 $3,468
Average supply
boat
utilization
rates(2).......... 93% 92%
Number of crew
boats at end of
period(3)(4)...... 26 35
Crew boat day
rates(1)(3)....... $1,458 $1,460
Average crew boat
utilization
rates(2)(3)....... 91% 89%
</TABLE>

- -----------------------

(1) Average day rates are calculated by dividing total vessel revenue by the
total number of days the vessel worked.

(2) Utilization rates are calculated by dividing the fleet average number of
days worked by 365.

(3) Excludes utility boats.

(4) The Company first began operating crew boats in July 1994.

22
<PAGE>
During the past five years, utilization and day rates in the Gulf of Mexico
were at their lowest during the summer of 1992 when the Company estimates
average offshore supply vessel day rates were $1,300 to $1,400. As a result, in
the summer of 1992, a number of operators relocated supply boats from the Gulf
of Mexico to West Africa, the Arabian Gulf, and Southeast Asia. The Company
relocated five supply boats to the Arabian Gulf (four of which have been
returned to the Gulf of Mexico) and two to Southeast Asia in September 1992.
Utilization and day rates in the Gulf of Mexico increased through the end of
1993 as a result of (i) Hurricane Andrew in the fall of 1992, which caused
substantial damage to rigs and greater demand for supply boats, (ii) higher
natural gas prices and increased drilling activity for natural gas, and (iii)
the reduced supply of immediately available vessels. Relocation of vessels to
the Gulf of Mexico in early 1994 depressed rates and utilization until the end
of the second quarter of 1994. Industry utilization and day rates were lower in
the first half of 1995 because of weak natural gas prices, primarily due to the
warm winter in North America and Europe.

Increased activity in the Gulf of Mexico since the second quarter of 1995
has been primarily attributable to improved technology in the seismic industry
and an approximate balance in the supply of and demand for offshore service
vessels. Deepwater activity is also currently a positive factor in the market,
and management believes further deepwater exploration and production will likely
increase demand for available vessels, resulting in higher day rates and
utilization. Domestic inventories of energy reserves are currently closer to
demand levels and, as a result, management believes that exploration and
development activity will continue at an aggressive pace in order for oil
companies to maintain inventories, thereby resulting in a more disciplined
market without the dramatic fluctuations historically experienced. As a result,
management believes the offshore energy support sector should be subject to less
market fluctuation in the future.

Day rates in the Arabian Gulf, where the Company currently operates one
supply boat, decreased during 1995, and that market continues to be depressed.
Rates in Southeast Asia increased slightly, although utilization was lower than
anticipated by the Company.

Offshore and Harbor Towing. Revenue derived from the Company's tug
operations is primarily a function of the number of tugs available to provide
services, the rates charged for their services, and the volume of vessel traffic
requiring docking and other ship-assist services. Vessel traffic, in turn, is
largely a function of the general trade activity in the region served by the
port. The Company generally has maintained four to five tugs in Port Everglades,
and three each in Port Canaveral and Mobile, although it has shifted tugs among
ports depending upon demand. With the delivery of the tractor tug Broward, the
Company has operated up to five tugs in Port Everglades with one of the tugs
available to provide offshore towing services. The Company's tug revenue
increased 5% from 1993 to 1994 and 13% from 1994 to 1995, primarily as a result
of higher port activity levels and, to a lesser extent, rate increases to cover
cost inflation.

The following table summarizes certain operating information for the
Company's tugs.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------- ----------------
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
Number of tugs at end of period(1)............ 10 10 11 10 11
Total ship docking tug jobs(2)................ 8,178 8,740 9,233 2,232 2,458
Total offshore and harbor towing revenue (in
thousands).................................... $10,585 $11,140 $12,582 $2,887 $3,625
</TABLE>

- -----------------------

(1) The Company's eleventh tug was delivered in August 1995.

(2) Excludes offshore towing jobs.

23
<PAGE>
MARINE TRANSPORTATION SERVICES

Chemical Transportation. Generally, demand for industrial chemical
transportation services coincides with general economic activity. Since 1989,
revenue derived from chemical transportation operations has been entirely
attributable to the operations of Ocean Specialty Tankers Corporation ("OSTC"),
a company owned equally by OMI Corp. ("OMI") and the Company. The Company's two
chemical carriers, together with the three OMI Chemical Carriers to be acquired
by the Company, have been chartered to OSTC, which has marketed the five vessels
under a pool arrangement. The Company has derived efficiencies in overhead and
utilization by participating in the pool arrangement. The Company's revenue from
industrial chemical transportation operations has consisted of distributions
from OSTC based upon a formula that takes into account individual vessel
performance characteristics applied to OSTC's revenues (net of fuel costs, port
charges, and overhead). Following the acquisition by the Company of the OMI
Chemical Carriers and the remaining 50% interest in OSTC, the Company intends to
continue to have OSTC market the Company's five chemical carriers. See
"Business-- Company Operations--Marine Transportation Services--Chemical
Transportation-- OSTC."

Petroleum Product Transportation. Since entering service in 1975, the
product carrier Seabulk Challenger has derived all of its revenue from
successive voyage and time charters to Shell. Under the current charter, fuel
and port costs are for the account of the charterer, charter hire escalates
based upon changes in the consumer price index, and charter hire is suspended
while the vessel is unavailable to transport cargo, as when it is undergoing
repairs or regularly scheduled maintenance. The charter extends to January 2000,
with the charterer retaining the right to early termination upon the payment to
the Company of a significant penalty. Revenue from the Company's towboats and
fuel barges has been derived primarily from contracts of affreightment with FPL
and Steuart Petroleum Co. that require the Company to transport fuel as needed
by those two customers, with the FPL contract having a guaranteed minimum
utilization.

The following table sets forth the average time charter equivalents for the
Company's chemical and product carriers, including the three OMI Chemical
Carriers to be acquired.
<TABLE><CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------- ------------------
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
Number of vessels........................... 6 6 6 6 6
Time charter equivalents(1)................. $24,566 $24,751 $25,629 $25,549 $24,914
</TABLE>

- -----------------------

(1) Time charter equivalents are calculated by deducting total voyage expenses
from total voyage revenue and dividing the result by the total days per
voyage.

OVERVIEW OF OPERATING EXPENSES AND CAPITAL EXPENDITURES

The Company's operating expenses are primarily a function of fleet size and
utilization levels. The most significant expense categories are crew payroll and
benefits, depreciation and amortization, charter hire, maintenance and repairs,
fuel, and insurance.

The crews of the Company's chemical and product carriers are paid on a
time-for-time basis by which they receive paid leave in proportion to time
served aboard a vessel. The crews of certain tugs, towboats, and offshore energy
support vessels are paid only for days worked.

The Company capitalizes expenditures exceeding $5,000 for product and
chemical tankers and $3,000 for all other vessels, where the item acquired has a
useful life of three years or greater. Vessel improvements and vessel
maintenance and repair are capitalized only if they also extend the useful life
of the vessel or increase its value. The Company overhauls main engines and key
auxiliary equipment in accordance with a continuous planned maintenance program.
Under applicable regulations, the Company's chemical and product carriers,
offshore service vessels, and its four largest tugs are required to be drydocked
twice in a five-year period for inspection and routine maintenance and repairs.
These vessels

24
<PAGE>
are also required to undergo special surveys every five years involving
comprehensive inspection and corrective measures to insure their structural
integrity and proper functioning of their cargo and ballast piping systems,
critical machinery and equipment, and coatings. The Company's fuel barges,
because they are operated in fresh water, are required to be drydocked only
twice in each ten-year period. The Company's harbor tugs and towboats generally
are not required to be drydocked on a specific schedule. During the years ended
December 31, 1993, 1994, and 1995, the Company drydocked five, 13, and 42
vessels, respectively, at an aggregate cost (exclusive of lost revenue) of $0.9
million, $1.6 million, and $2.0 million, respectively. See "--Liquidity and
Capital Resources--Capital Expenditures" for information regarding anticipated
maintenance and improvement expense, including drydocking expense. Effective
January 1, 1993, the Company changed its method of accounting for drydocking
costs from the accrual method to the deferral method. Under the deferral method,
capitalized drydocking costs are expensed over the period preceding the next
scheduled drydocking. The Company believes the deferral method better matches
costs with revenue and minimizes any significant changes in estimates associated
with the accrual method. See Note 1 of the Company's consolidated financial
statements. In addition to variable expenses associated with vessel operations,
the Company incurs fixed charges to depreciate its marine assets. The Company
calculates depreciation based on a useful life ranging from 25 years for its
steel-hull offshore energy support vessels to 30 years for aluminum-hull
vessels, the lesser of any applicable lease term life or the OPA 90 life for its
product and chemical carriers, ten years for its fuel barges, and 40 years for
its towboats and tugs.

Charter hire consists primarily of payments made with respect to the
bareboat charters of the Seabulk Challenger and Seabulk Magnachem, which were
acquired pursuant to leveraged lease transactions (see "Description of Certain
Indebtedness--Long-Term Charter Obligations--Title XI Bonds"). The Company
intends to enter into a sale/leaseback arrangement for the OMI Star. The Company
also pays charter hire when it charters harbor tugs to meet requirements in
excess of its own tugs' availability. This typically occurs in Mobile when the
Company charters one or two tugs to assist with the docking or undocking of a
particular vessel.

Insurance costs consist primarily of premiums paid for (i) protection and
indemnity insurance for the Company's marine liability risks, which are insured
by a mutual insurance association of which the Company is a member and through
the commercial insurance markets; (ii) hull and machinery insurance and other
maritime-related insurance, which are provided through the commercial marine
insurance markets; and (iii) general liability and other traditional insurance,
which is provided through the commercial insurance markets. Insurance costs,
particularly costs of marine insurance, are directly related to overall
insurance market conditions and industry and individual loss records, which vary
from year to year.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1995

Revenue. Revenue increased 28% to $20.2 million for the three months ended
March 31, 1996 from $15.8 million for the three months ended March 31, 1995
primarily due to increased revenue in the Company's offshore energy support,
petroleum product transportation, and offshore and harbor tug operations.

Revenue from offshore energy operations increased 53% for the three months
ended March 31, 1996 primarily due to acquisitions and greater utilization of
supply and crew boats and higher day rates resulting from a colder winter which
served to strengthen natural gas prices and thereby increased offshore
exploration and production activity. Utilization of supply boats increased to
92% for the 1996 period from 71% for the 1995 period, and utilization of crew
boats increased to 89% for the 1996 period from 79% for the 1995 period. During
the 1996 period, day rates for supply boats owned, operated, or managed by the
Company increased 20% from the 1995 period, and day rates for crew boats owned,
operated, or managed by the Company increased 2% from the 1995 period.

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Petroleum product transportation revenue increased 29% to $4.7 million for
the three months ended March 31, 1996 from $3.6 million for the three months
ended March 31, 1995 primarily due to increased movements of product by the
Company's towboat and barge fleet as a result of the cold winter and higher
natural gas prices.

Revenue from offshore and harbor tug operations increased 26% to $3.6
million for the three months ended March 31, 1996 from $2.9 million for the
three months ended March 31, 1995 primarily as a result of increased tanker and
freighter traffic in Port Everglades. Revenue also increased in the port of
Mobile due to a tariff increase and an increase in port traffic.

Operating Expenses. Operating expenses increased 32% to $12.2 million for
the three months ended March 31, 1996 from $9.3 million for the three months
ended March 31, 1995 primarily due to increases in crew payroll and benefits,
maintenance and repair, and supplies and consumables resulting from acquisitions
and increased business activity. As a percentage of revenue, operating expenses
increased to 60% for the three months ended March 31, 1996 from 59% for the
three months ended March 31, 1995.

Overhead Expenses. Overhead expenses increased 33% to $3.6 million, or 18%
of revenues, for the three months ended March 31, 1996 from $2.7 million, or 17%
of revenues, for the three months ended March 31, 1995 primarily due to an
increase in professional fees relating to pending litigation. Additionally,
salaries and benefits increased as a result of an increase in staffing
requirements due to acquisitions.

Depreciation and Amortization. Depreciation and amortization expense
increased 13% to $1.7 million for the three months ended March 31, 1996 compared
with $1.5 million, for the three months ended March 31, 1995 as a result of an
increase in fleet size due to acquisitions.

Income from Operations. Income from operations increased 17% to $2.7
million, or 13% of revenue, for the three months ended March 31, 1996 from $2.3
million, or 15% of revenue, for the three months ended March 31, 1995 as a
result of the factors noted above.

Interest. Net interest expense increased 6% to $2.9 million, or 14% of
revenue, for the three months ended March 31, 1996 from $2.7 million, or 17% of
revenue, for the three months ended March 31, 1995 primarily as a result of debt
incurred in connection with acquisitions.

Other Income (Expense). Other income increased to $0.2 million for the three
months ended March 31, 1996 from other expense of ($0.2) million for the three
months ended March 31, 1995 primarily due to an increase in minority interest
income in 1996 and a write off in 1995 of prior year repairs.

Net Income (Loss). The Company was near break-even for the three months
ended March 31, 1996 after incurring a net loss of $0.6 million for the three
months ended March 31, 1995 primarily as a result of the factors noted above.

YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER 31, 1994

Revenue. Revenue increased 42% to $70.6 million in 1995 compared with $49.8
million in 1994 primarily due to the Company's purchase of new businesses and
additional vessels.

Offshore energy operations showed a 105% increase in revenue in 1995
primarily due to the acquisition of additional supply and crew boats. Although
revenue increased, the utilization of supply boats decreased to 81% in 1995 from
84% in 1994 and the utilization of crew boats decreased to 85% in 1995 from 88%
in 1994 due primarily to the relatively warm winter in early 1995, which caused
a decline in oil and gas prices thereby reducing exploration and production
activities. There was a 5% decrease in average day rates for the Company's
supply boats in 1995 from 1994, while average day rates for the Company's crew
boats remained relatively stable.

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Chemical transportation revenue increased 10% in 1995 primarily due to fewer
off-hire (out-of-service) days incurred by the Seabulk Magnachem in 1995
following its regularly scheduled drydocking in 1994.

Revenue from petroleum product transportation increased 54% in 1995
primarily due to a full year of operating results for the Sun State tug and
barge fleet, which was acquired in September 1994.

Revenue from offshore and harbor tug operations increased 13% to $12.6
million in 1995 from $11.1 million in 1994 primarily due to an increase in
overall traffic in the ports served by the Company.

Operating Expenses. Operating expenses increased 36% to $40.7 million in
1995 from $29.9 million in 1994 primarily due to increased operating expenses
associated with acquisitions, although operating expenses decreased as a
percentage of revenues to 58% in 1995 from 60% in 1994.

Overhead Expenses. Overhead expenses increased 31% to $12.5 million in 1995
compared with $9.6 million in 1994 primarily due to increases in staffing,
certain benefits, and insurance expenses directly related to new business
acquisitions. Also, in addition to paying discretionary performance bonuses in
April 1995 which were, in part, related to prior periods, an accrual of $400,000
was made at year end for 1995 performance bonuses. As a percentage of revenues,
overhead expenses decreased to 18% in 1995 from 19% in 1994.

Depreciation and Amortization. Depreciation and amortization expense
increased 40% to $6.3 million in 1995 compared with $4.5 million in 1994
primarily due to an increase in fleet size as a result of acquisitions.

Income from Operations. Income from operations increased 90% to $11.1
million, or 16% of revenue, in 1995 compared with $5.8 million, or 12% of
revenue, in 1994. This increase was a result of a substantial increase in income
from operations from the Company's offshore energy segment and an increase in
the Company's fuel energy segment that were mainly the result of acquisitions.
Harbor towing achieved an increase in income from operations of 25% over 1994 as
a result of an overall increase in traffic in Mobile, Port Canaveral, and Port
Everglades.

Interest. Net interest expense increased 116% to $11.5 million, or 16% of
revenue, in 1995 compared with $5.3 million, or 11% of revenue, in 1994
primarily due to interest on debt incurred in the last quarter of 1994 to
finance acquisitions.

Net Income (Loss). The Company had a net loss of $(0.4) million in 1995
compared with net income of $0.4 million in 1994, primarily due to an increase
in financing costs incurred in connection with acquisitions completed in 1994
and the other factors noted above.

YEAR ENDED DECEMBER 31, 1994 COMPARED WITH YEAR ENDED DECEMBER 31, 1993

Revenue. Revenue increased 20% to $49.8 million for the year ended December
31, 1994 compared with $41.5 million for the year ended December 31, 1993
primarily due to the addition of revenue from acquisitions completed in 1994.
Revenue from offshore energy support services increased 150% primarily due to
revenue from such acquisitions. In addition, the Company's average Gulf of
Mexico supply boat day rates increased 19% in 1994 from an average of $2,696 per
day in 1993 to $3,195 per day in 1994, although supply boat fleet utilization
decreased from 98% to 84% due to the drydocking of two boats and the addition of
two boats with relatively low utilization rates in 1994. Revenue from chemical
transportation decreased 3% due to the Seabulk Magnachem having greater off-hire
time due to a regularly scheduled drydocking in April 1994. Revenue from
petroleum product transportation increased 15% primarily due to the Sun State
acquisition in September 1994. Offshore and harbor tug towing revenues increased
5% due to a general increase in vessel traffic in the ports served by the
Company.

Operating Expenses. Operating expenses increased 24% to $29.9 million, or
60% of revenue, for the year ended December 31, 1994 compared with $24.0
million, or 58% of revenue, for the year ended December 31, 1993 primarily due
to the increased operating expenses associated with the acquisitions

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<PAGE>
completed in 1994. Charter hire expense increased due to the Company's
chartering in May and June of 1994 of certain supply and crew boats that were
acquired in September 1994, partly offset by a decrease in charter hire expense
due to the acquisition in September 1994 of the interests in the limited
partnership that owned the tug Hollywood (formerly the Cape Canaveral), which
was previously chartered to the Company.

Overhead Expenses. Overhead expenses increased 55% to $9.6 million, or 19%
of revenue, for the year ended December 31, 1994 compared with $6.2 million, or
15% of revenue, for the year ended December 31, 1993 primarily due to increased
corporate staffing and other greater infrastructure costs associated with the
acquisitions completed in 1994, greater litigation expenses relating to the
Seabulk America (see "Business--Legal Proceedings"), and expenses incurred to
prepare an initial public offering which was postponed due to market conditions.
Bonuses of approximately $280,000 were paid to Company management personnel in
October 1994 (no bonuses to management personnel were paid in 1993).

Depreciation and Amortization. Depreciation and amortization expense
decreased 5% to $4.5 million for the year ended December 31, 1994 compared with
$4.7 million for the year ended December 31, 1993 primarily due to the
amortization of expenses incurred in 1993 to transport four offshore supply
boats from the Gulf of Mexico to the Arabian Gulf.

Income from Operations. Income from operations decreased 11% to $5.8
million, or 12% of revenue, for the year ended December 31, 1994 compared with
$6.6 million, or 16% of revenue, for the year ended December 31, 1993 primarily
as a result of the factors described above.

Interest. Net interest expense increased 55% to $5.3 million, or 11% of
revenue, for the year ended December 31, 1994 compared with $3.4 million, or 8%
of revenue, for the year ended December 31, 1993 primarily due to interest due
on the debt incurred to finance the acquisitions completed in 1994.

Net Income. Net income decreased to $0.4 million for the year ended December
31, 1994 compared with $3.3 million for the year ended December 31, 1993
primarily due to the factors described above and an approximate $1.5 million
gain in 1993 resulting from a change in the Company's method of accounting for
drydocking.

SEASONALITY

The Company has experienced some slight seasonality in its overall
operations. The first half of the year is generally not as strong as the second
half due to lower activity in offshore energy support activity and petroleum
transportation during the months of February, March, and April.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity requirements historically have arisen primarily from
its debt service requirements, working capital needs, preferred stock dividends,
and vessel acquisitions and improvements. During 1994, the Company's primary
capital requirements included an aggregate of $54.8 million for debt service
requirements (including $50.8 million of refinancings) and a total of $33.6
million for acquisitions. In 1995, debt service requirements totalled $15.0
million and the cash portion of the acquisition costs were $2.9 million.

The Company's principal sources of cash have been proceeds from borrowings
and cash provided by operating activities. In September 1994, the Company
entered into the Credit Facility with certain banks which, as amended in March
1996, currently provides for a $45.5 million term loan, $15.0 million of
revolving lines of credit, and a $5.6 million letter of credit. At December 31,
1994 and 1995, aggregate borrowings under the Credit Facility were $50.0 million
and $53.5 million, respectively. Also in September 1994, the Company issued
$25.0 million of Senior Notes and $25.0 million of Junior Notes at discounts
resulting in proceeds of $23.1 million and $17.5 million, respectively.
Borrowings under the Credit Facility, the Senior Notes, and the Junior Notes
were utilized primarily to repay other

28
<PAGE>
indebtedness and to fund vessel acquisitions. See "--Recent and Pending
Acquisitions" and "Description of Certain Indebtedness." A portion of the
proceeds from the Offering will be used to repay $6.8 million under the Credit
Facility, $0.6 million of accrued interest on and $13.5 million of principal of
the Senior Notes, and $15.1 million of accrued interest and principal under the
Junior Notes. See "Use of Proceeds." The balance of the outstanding principal
under the Junior Notes will be converted into Class A and Class B Common Stock.
See "The Company."

The Credit Facility has been amended (effective upon the consummation of the
Offering) to increase the term loan to $60.5 million, decrease the lines of
credit to $10.0 million, and establish a $25.0 million vessel acquisition credit
line which decreases to $11.5 million over a four-year period. To the extent
that the gross proceeds of the Offering, including proceeds from the exercise of
the Underwriters' over-allotment option, if any, are less than $91.0 million,
the initial amount available under the vessel acquisition credit line will be
reduced by the amount of such shortfall. The gross proceeds from the sale of the
7,000,000 shares offered hereby are $84.0 million. Accordingly, if the
Underwriters' over-allotment option is not exercised, the vessel acquisition
credit line will be reduced to $18.0 million. Advances under the vessel
acquisition credit line may not exceed either (i) 70% of the lesser of the
purchase price or appraised value of the vessel being acquired, or (ii) a
multiple of six times EBITDA of the acquisition. After giving effect to (i)
consummation of the Offering and application of the net proceeds therefrom and
(ii) completion of the Acquisitions, the Company will, under such amended Credit
Facility, have $60.5 million outstanding under the term loan, $4.2 million
outstanding under the vessel acquisition credit line, and $3.7 million
outstanding under the lines of credit. Borrowings under the Credit Facility bear
interest at prime or LIBOR, at the Company's option, plus a margin based on the
Company's compliance with certain financial ratios. See "Description of Certain
Indebtedness--Bank Debt" for additional information concerning the Credit
Facility.

The Company's future capital needs are expected to relate primarily to debt
service obligations, maintenance and improvement of its fleet, and acquisitions.
The Company's outstanding indebtedness at March 31, 1996, on a pro forma basis
after giving effect to the Offering and the Acquisitions, would have been
approximately $137.8 million. Following the Offering and consummation of the
Acquisitions, debt service requirements for all of 1996 will include principal
and interest payments of approximately $12.6 million and $10.0 million,
respectively (assuming interest rates remain steady), and operating lease
obligations for 1996 will total approximately $3.8 million. The Company's
principal and interest payment obligations increase to $14.9 and $9.8 million,
respectively, in 1997 and operating lease obligations increase slightly in 1997
to approximately $3.9 million.

Capital requirements for vessel maintenance and improvement are estimated to
be $8.0 million for 1996, of which $2.0 million had been expended as of March
31, 1996, and $10.0 million for 1997.

Since 1993, the Company has grown primarily through a series of strategic
acquisitions. See "--Recent and Pending Acquisitions." Pursuant to the
Acquisitions, the Company expects to acquire title to 15 vessels. The aggregate
purchase price of the Acquisitions is $99.7 million, consisting of approximately
$37.7 million in cash and the assumption or issuance of $62.0 million of debt
obligations. The cash portion of the purchase price of the Acquisitions will be
funded with a portion of the proceeds from the Offering. See "Use of Proceeds"
and "Business--The Acquisitions."

The Company has a 2.4% equity interest in five 45,300 dwt petroleum product
carriers currently under construction. The aggregate cost of the five carriers
is estimated to be $255.0 million, of which approximately $40.0 million will
constitute equity investment and $215.0 million will be financed with the
proceeds of government-guaranteed Title XI ship financing bonds issued in March
1996. Subject to certain conditions, the Company has an option, exercisable
through 2002, to purchase a 49.3% interest at a price equal to (i) the
investor's equity investment plus a stated annual return, or (ii) if exercised
after December 31, 1997, the greater of the fair market value of the interest or
the amount set forth in (i). The Company also has an option, exercisable on
January 15, 1998, to purchase an additional 23.4% interest at a price equal to
the investor's equity investment plus a stated return. Should the Company fail
to exercise the latter option, the investor has the option to acquire 1.6% of
the ownership

29
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interest from the Company for nominal consideration. The total estimated cost of
exercising the Company's options is up to $32.0 million (assuming the options
are exercised prior to January 1, 1998). The Company currently has no
understandings or agreements with respect to the financing that it would require
if it were to exercise any or all of these options, and there can be no
assurance that such financing will be available.

The Company's existing indebtedness restricts the Company's subsidiaries
from paying dividends or making other distributions to the Company. The Company
does not believe that this restriction has had or will have a material effect
upon its ability to meet its cash obligations because a substantial portion of
those obligations are payable by its subsidiaries.

The Company is the defendant in litigation in which one of the shipyards
that completed the Seabulk America is seeking additional payments aggregating
$8.5 million for its work. See "Business-- Legal Proceedings." Although the
Company believes the shipyard's claims are without merit and has asserted
counterclaims aggregating $5.6 million, the Company has obtained a bank letter
of credit to finance up to $5.6 million of any additional payment that it might
ultimately be required to make pursuant to this litigation. See "Description of
Certain Indebtedness--Bank Debt."

At March 31, 1996, pro forma for the Acquisitions and the Offering, the
Company would have had a working capital deficit of $3.7 million. The Company
believes that cash generated from operations and amounts available under the
Credit Facility will be sufficient to fund debt service requirements, planned
capital expenditures, and working capital requirements for the foreseeable
future. The Company also believes that such resources, together with the
potential use of equity financing, will allow the Company to pursue its strategy
of growth through acquisitions. As future cash flows are subject to a number of
uncertainties, including the condition of the markets served by the Company,
there can be no assurance that these resources will continue to be sufficient to
fund the Company's cash requirements.

EFFECT OF INFLATION

The Company does not consider inflation a significant business risk in the
current and foreseeable future although the Company has experienced some cost
increases. In some cases, these increases have been offset by charter hire
escalation clauses.

NEW ACCOUNTING STANDARDS

In March 1995, the FASB issued Statement of Financial Accounting Standards
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, ("FASB Statement No. 121") which requires impairment
losses to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount. FASB Statement No.
121 also addresses the accounting for long-lived assets that are expected to be
disposed of. The Company adopted FASB Statement No. 121 in the first quarter of
1996 and the effect of adoption was not material.

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<PAGE>
BUSINESS

GENERAL

The Company provides marine support and transportation services primarily in
the U.S. domestic trade and principally to the energy and chemical industries.
The Company is the third largest operator of supply and crew boats in the Gulf
of Mexico. In addition, the Company is the sole provider of commercial tug
services in Port Everglades and Port Canaveral, Florida, and a leading provider
of such services in Mobile, Alabama. The Company also transports petroleum
products and specialty chemicals in the U.S. domestic trade, a market insulated
from international competition under the Jones Act. The total capacity of the
Company's five chemical carriers, pro forma for the Acquisitions, represents
approximately 44% of the capacity of the independent domestic specialty chemical
carrier fleet, and four of the five vessels are among the most recently built
and the only independently owned, diesel-powered chemical carriers with full
double-bottom hulls operating in the U.S. domestic trade.

The Company has grown rapidly through a series of strategic acquisitions,
increasing its marine support fleet from 20 vessels in 1993 to 74 vessels
currently and its marine transportation fleet from three vessels in 1993 to 29
vessels currently, in each case pro forma for the Acquisitions. As a result, the
Company's revenues increased approximately 196% from $41.5 million in 1993 to
$123.0 million in 1995, on a pro forma basis. Over the same period, the
Company's EBITDA increased approximately 181% from $11.3 million to $31.7
million and its income from operations increased 187% from $6.6 million to $18.9
million, in each case on a pro forma basis. For other measures of the Company's
operating results as determined under generally accepted accounting principles
and its pro forma operating results, see "Selected Historical and Pro Forma
Consolidated Financial Data" and the Company's consolidated financial
statements.

The Company has been operating in the marine support services industry since
its founding in 1958 and has been engaged in the transportation of petroleum
products and chemicals for 21 and 19 years, respectively. The Company's
executive officers have an average of over 18 years of experience in the marine
transportation industry, including an average of over 13 years with the Company.
The Company emphasizes promotion from within, regular training, and permanent
vessel assignments, which it believes results in a comparatively low rate of
personnel turnover. As a result, the Company believes that its employees are
among the most efficient in the marine transportation industry and that it has
had favorable experience with respect to employee turnover and employee injury
claims. The Company's employees are predominantly non-union. See "--Employees."

STRATEGY

The Company's strategy is to realize the benefits presented by the
integration of its recent and pending acquisitions with its existing operations
and to continue to grow through selected acquisitions that further consolidate
the marine support and transportation services markets in which the Company
operates. The Company believes it has significant opportunities to make further
accretive acquisitions in its core businesses. Critical elements of the
Company's strategy include continuing to (i) utilize its demonstrated expertise
in acquiring and consolidating diverse marine operations, (ii) focus its
operations in the U.S. domestic trade, (iii) develop and apply marine technology
to meet its customers' needs in an innovative and cost-effective manner, (iv)
maintain and pursue long-term customer relationships that limit the risk
associated with the investments required for new vessels and mitigate the
effects of industry cyclicality, and (v) enhance its record of quality service
and safety.

Demonstrated Expertise in Acquiring and Consolidating Diverse Marine
Operations. Many domestic maritime transportation markets, including offshore
energy support and towing, are undergoing consolidation. Small, privately owned
companies face increasing difficulty competing for market share, obtaining
adequate insurance coverage at economically viable rates, and meeting
increasingly more stringent customer and regulatory safety and environmental
requirements. The Company believes it is well positioned to take advantage of
this consolidation trend. The Company's recent acquisitions have substantially
increased the size of its fleet, established it as one of the leading operators
in the

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offshore energy market, and given it a reputation as a successful consolidator
in its niche markets. See "--The Acquisitions" and "Management's Discussion and
Analysis of Financial Conditions and Results of Operations--Recent and Pending
Acquisitions."

U.S. Domestic Market Focus. The Company intends to continue to concentrate
its operations in markets protected by the Jones Act against competition from
foreign-built, foreign-crewed vessels. As a result, most of the Company's
vessels are, and will continue to be, built and maintained to U.S. standards and
registered under the U.S. flag. The Company believes that domestic energy and
chemical transportation freight rates will increase within the next three to
five years and continue to rise thereafter, as the supply of vessels eligible to
carry petroleum and other hazardous substances diminishes as a result of
mandatory retirement imposed by OPA 90.

Technological Leadership and Business Innovation. The Company believes it
has been a leader in developing and applying marine technology to meet its
customers' needs in a cost-effective manner. Principals of the Company designed,
engineered, and developed the CATUG(R) integrated tug/barge ("ITB"), in which a
catamaran-hull tug is married to the stern section of a dedicated barge to
achieve construction cost savings and operating efficiencies, such as lower
manning requirements. The Seabulk Challenger, the Company's petroleum product
carrier, was the first of 12 CATUG(R)s constructed in the world. The Company's
Seabulk America is an innovative combination of the stern portion of a wrecked
oil tanker with the forebody of the chemical barge portion of a former ITB. By
combining this stern and forebody, the Company obtained the most recently
constructed chemical carrier in the U.S. domestic trade at a cost substantially
lower than that of a newly constructed vessel. The Company has demonstrated its
business innovation in the formation of the only pool of chemical carriers in
the U.S. domestic trade and most recently in the formation of the entities that
will own five new petroleum product carriers currently under construction. See
"--Company Operations--Marine Transportation Services."

Long-term Relationships. The Company currently maintains and continues to
pursue long-term customer relationships. Long-term contracts can both minimize
the risk associated with the substantial investments frequently required for new
vessels and mitigate the effects of any cyclical downturns in the industry. This
element of the strategy began with the Company's long-term charter of its
petroleum product carrier to Shell and continued with the acquisition of the
towboat and fuel barge fleet in September 1994, which has a long-term contract
with FPL.

Quality Service and Safety. Over a span of nearly 38 years, the Company
believes it has built a reputation for providing its customers with the highest
quality service and safety in terms of timeliness, dependability, and technical
expertise. The Company continuously seeks to improve the quality of its service
both by upgrading the capabilities of its vessels and by increasing the skill
levels of its employees. It believes, for example, that its chemical carriers
have experienced a particularly low level of cargo degradation claims relative
to its competitors; that its emphasis on preventive maintenance minimizes vessel
time out of service and repair expenses; and that its reputation provides an
advantage in retaining customer loyalty (particularly in times of excess
capacity) and in entering new markets.

As part of its continuing effort to maintain high standards of quality and
safety, the Company has implemented a program intended to qualify it for
certification under quality assurance, safety, and environmental standards
established under ISO 9002, which are voluntary, and the International Ship
Management Code, which become mandatory in July 1998. The Company was recently
audited as part of the certification process for both sets of standards, and on
May 15, 1996 was awarded its certification of compliance with ISO 9002. The
Company's success in establishing high levels of quality and safety are further
reflected by its receipt of Shell's offshore safety award for the last three
years and a 69% reduction in the rate of recordable safety incidents per manhour
from 1991 to 1995, a period during which total manhours increased 68%.

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THE ACQUISITIONS

The Company has entered into purchase agreements with five different sellers
to acquire title to an aggregate of 15 vessels (collectively, the
"Acquisitions"). The Acquisitions include the purchase of (i) the three OMI
Chemical Carriers and the remaining 50% interest in OSTC from OMI; (ii) eight
offshore supply boats (the "Seal Fleet Vessels") from Seal Fleet, Inc. and
certain partnerships (collectively, "Seal Fleet"); (iii) a 152-foot crew/supply
boat, to be named the Seabulk St. Francis, currently under construction, from
Mr. J. Erik Hvide, Chairman of the Board of the Company, and the Investor Group;
(iv) an existing 120-foot crew boat to be named the Carol from Leppaluoto
Offshore Marine, Inc. ("Leppaluoto"); and (v) two 175-foot offshore supply boats
from IMI Marine Operations, Inc. ("IMI Marine"). The Offering is conditioned
upon the simultaneous consummation of the acquisition of the OMI Chemical
Carriers and the Seal Fleet Vessels. The other transactions are expected to be
completed as soon as practicable after consummation of the Offering.

The aggregate purchase price of the Acquisitions is $99.7 million,
consisting of approximately $37.7 million in cash and the assumption or issuance
of $62.0 million of debt obligations. The cash portion of the purchase price
will be funded with a portion of the proceeds from the Offering and from general
corporate funds. Additional information concerning the acquisitions from OMI,
Seal Fleet, Leppaluoto, and IMI Marine is set forth below and additional
information concerning the purchase from Mr. Hvide and the Investor Group is set
forth in "Certain Transactions."

OMI. The Company and OMI entered into a stock purchase agreement, dated as
of October 12, 1995, as amended (the "OMI Agreement"), pursuant to which the
Company has agreed to purchase from OMI the three OMI Chemical Carriers and
OMI's 50% interest in OSTC for an aggregate purchase price of approximately
$64.7 million, consisting of approximately $30.0 million in cash and the
assumption of approximately $34.7 million in mortgage obligations related to two
of the OMI Chemical Carriers. The cash portion of the purchase price will be
funded with $15.5 million from the proceeds of the Offering, $7.5 million
provided by bank financing for one of the vessels, and $7.0 million through
additional borrowings under the Credit Facility. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources." For additional information concerning the OMI Chemical
Carriers, see "--Marine Transportation Services--Chemical Transportation."

Seal Fleet. The Company and Seal Fleet have entered into asset purchase
agreements, dated as of March 29, 1996 and amended as of July 23, 1996 (the
"Seal Fleet Agreements"), pursuant to which the Company has agreed to purchase
three offshore supply boats from Seal Fleet, Inc., and five supply boats
currently managed by Seal Fleet, Inc. from certain partnerships. The aggregate
purchase price is $26.1 million in cash, of which $16.8 million will be funded
with a portion of the proceeds of the Offering and $9.3 million will be financed
with borrowings under the Credit Facility. One of the Seal Fleet Agreements
provides for the purchase by the Company of short-term rights under a bareboat
charter of one additional supply boat from Seal Fleet, Inc. The Company has been
notified that the owner of such supply boat intends to terminate the bareboat
charter and, accordingly, the Company will not acquire any rights under the
charter.

The Seal Fleet acquisition is subject to certain customary conditions,
including the approval of the shareholders of Seal Fleet, Inc., a publicly held
company, which approval has been obtained. In connection with the Seal Fleet
acquisition, the Company has agreed to indemnify certain affiliates of Seal
Fleet, Inc. against certain liabilities to its creditors. Seal Fleet, Inc. is
expected to have limited net worth following the acquisition and its ability to
fully service its obligations will be dependent on its ability to collect its
accounts receivable and may be dependent upon its ability to complete a
successful business combination. The Company's maximum liability pursuant to the
indemnity agreement relating to liabilities to creditors of Seal Fleet, Inc. is
$7.0 million. The Company has also agreed to indemnify Seal Fleet, Inc., the
members of its Board of Directors, and such affiliates for certain liabilities
they may incur as a result of the Board's approval of the Seal Fleet
acquisition.

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The Company acquired 96,000 shares of Class A Common Stock of Seal Fleet,
Inc. in July 1996. In connection with the Seal Fleet acquisition, the Company
has also agreed to acquire, for nominal consideration, 212,655 shares, or
approximately 11%, of the outstanding shares of Class A Common Stock, and 50,000
shares, or 100%, of the outstanding shares of Class B Common Stock, of Seal
Fleet, Inc. The Company has agreed to the simultaneous transfer, for nominal
consideration, of 37,600 Class A shares and all of the Class B shares to an
entity controlled by Thomas M. Ferguson, the principal of a consulting firm
engaged by the Company. The holder of the Seal Fleet Class B Common Stock is
entitled to elect a majority of the Board of Directors of Seal Fleet, Inc.
Following the Seal Fleet acquisition, the Company will hold approximately 13.7%
of the outstanding shares of Class A Common Stock of Seal Fleet, Inc., and two
individuals who are officers and directors of the Company will be members of the
Seal Fleet, Inc. board of directors. Mr. Ferguson has agreed to indemnify the
Company against any liability it incurs under the indemnification it undertakes
in connection with the Seal Fleet acquisition. See "Certain Transactions" for
additional information including security being provided by Mr. Ferguson for his
obligations to the Company.

Leppaluoto. On January 8, 1996, the Company entered into an agreement with
Leppaluoto to purchase the Carol, a 120-foot crew boat for $825,000, consisting
of $150,000 in cash and a $675,000 promissory note.

IMI Marine. On July 17, 1996 the Company entered into an agreement to
purchase two U.S.-flag, 175-foot supply boats built in 1983 from IMI Marine for
a total purchase price of $6.0 million, of which $1.8 million will be funded
with a portion of the proceeds of the Offering and $4.2 million will be borrowed
under the vessel acquisition credit line of the Credit Facility. Both boats are
currently operating in the Arabian Gulf and will be relocated to the Gulf of
Mexico following consummation of the acquisition.

THE INDUSTRY

All marine transportation between points in the United States, including
drilling rigs affixed to the U.S. outer continental shelf, is restricted by law
to vessels built and registered in the United States and owned and manned by
U.S. citizens. The U.S. domestic trade includes a number of market segments,
including the servicing of domestic offshore oil and gas drilling and production
platforms, the providing of offshore and harbor towing services to the offshore
energy industry, tankers and other vessels, and the transportation of fuels,
petroleum products, and chemicals along and between U.S. coasts. Approximately
40,000 vessels participate in the U.S. domestic trade. All of the Company's
vessels are eligible to participate in the U.S. domestic trade except for two
Panamanian-flag offshore supply boats operating in Southeast Asia pursuant to
contracts expiring in 1998.

MARINE SUPPORT SERVICES

Offshore Energy Support. Marine support vessels serving offshore energy
exploration and production operations are used primarily to transport materials,
supplies, equipment, and personnel to drilling rigs and to support the
construction, positioning, and ongoing operation of oil and gas production
platforms. Offshore energy support vessels are hired by oil companies and others
engaged in offshore exploration activities, generally on a short-term (less than
six months) basis at varying day rates. See "--Customers and Charter Terms." The
types of vessels primarily utilized in these activities are supply boats, crew
boats, and anchor handling vessels.

Supply boats (also called workboats) are generally at least 150 feet in
length and serve exploration and production facilities and support offshore
construction and maintenance activities. Supply boats are differentiated from
other vessel types by cargo flexibility and capacity. In addition to
transporting deck cargo, such as drill pipe and heavy equipment, supply boats
transport liquid mud, potable and drilling water, diesel fuel, dry bulk cement,
and dry bulk mud. With their relatively large liquid mud and dry bulk cement
capacity and large areas of open deck space, they are generally in greater
demand than other types of support vessels for exploration and workover drilling
activities.

34
<PAGE>
Crew boats (also called crew/supply boats) are faster and smaller than
supply boats and are utilized primarily to transport light cargo, including food
and supplies, and personnel to and among production platforms, rigs, and other
offshore installations. They can be chartered together with supply boats to
support drilling or construction operations or separately to serve the various
requirements of offshore production platforms. Crew boats are typically
constructed of aluminum and generally have longer useful lives than steel-hull
supply boats. Crew boats also provide a cost-effective alternative to helicopter
transportation services and can operate reliably in all but the most severe
weather conditions. Because crew boats support a wider range of offshore
activities than other vessel types, their utilization and day rates are
generally more stable than those of other types.

Anchor handling vessels, which include anchor handling tug/supply vessels
and some tugs, are more powerful than supply boats and are capable of towing and
positioning drilling rigs, production facilities, and construction barges. Some
are specially equipped to assist tankers while they are loading from
single-point buoy mooring systems.

There has been little new construction of offshore supply boats since the
early 1980s, resulting in substantial worldwide vessel attrition over the past
ten years as many vessels have reached the end of their useful lives. The number
of offshore supply boats available for service in the Gulf of Mexico decreased
from a peak of approximately 700 in 1985 to approximately 275 in March 1996.
During the same period, the number of companies operating supply boats of at
least 150 feet in length decreased from approximately 40 to 19. Day rates
declined in the mid-1980s and have since improved from an average of $1,730 in
1987 to an average of $3,793 in the first quarter of 1996. Although some supply
boats were redeployed from the Gulf of Mexico to overseas locations, management
believes that existing regulations, mobilization costs, and overseas
opportunities will limit the number of such vessels returning to the Gulf of
Mexico in the foreseeable future. Management believes that day rates have not
reached a level that will support significant new construction and estimates
that new construction of offshore supply vessels likely will be of larger, more
capable vessels of approximately 220 feet which would require sustained average
day rates of at least $7,500.

The Company estimates that there are currently approximately 31 crew boat
operators in the Gulf of Mexico, with a total fleet of 248 vessels of at least
100 feet in length. There are approximately 12 crew boats greater than 120 feet
in length currently under construction, including one such vessel the Company
intends to acquire, and the Company believes that current demand created by
exploration for oil in the deeper waters of the Gulf of Mexico may support
construction of a limited number of additional crew/supply boats.

The following table sets forth as of July 1, 1996, the Company's estimate of
the number of crew boats and supply boats operating in the Gulf of Mexico.

SUPPLY BOATS

COMPANY TOTAL BOATS

Tidewater, Inc................................................ 130
Seacor Marine, Inc............................................ 33
Ensco, Inc.................................................... 28
Trico Marine Services, Inc.................................... 20
HVIDE MARINE.................................................. 19(1)(2)
Others........................................................ 53

CREW BOATS

COMPANY TOTAL BOATS

Seacor Marine, Inc............................................ 72
HVIDE MARINE.................................................. 37(1)(3)
Tidewater, Inc................................................ 30
Trico Marine Services, Inc.................................... 16
Others........................................................ 93

- -----------------------

(1) Pro forma for the Acquisitions.

(2) Includes three vessels of which the Company is bareboat charterer and
operator and three vessels that will be returned from the Arabian Gulf to
the Gulf of Mexico in the third quarter of 1996.

(3) Includes ten vessels of which the Company is bareboat charterer and
operator.

35
<PAGE>
While offshore energy support vessels service existing exploration and
production activities, incremental vessel demand depends primarily upon the
level of drilling activity, which in turn depends on oil and gas prices. As a
result, utilization and day rates generally correlate with oil and gas prices,
which are highly cyclical. The relationship since 1993 between natural gas
prices and drilling rig utilization in the Gulf of Mexico and, similarly,
average vessel utilization, is displayed in the following table.
<TABLE><CAPTION>
1993 1994 1995
--------------------------------- --------------------------------- ---------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Natural gas
prices(1).............. $ 1.92 $ 2.16 $ 2.20 $ 2.21 $ 2.42 $ 1.95 $ 1.70 $ 1.60 $ 1.51 $ 1.63 $ 1.54 $ 2.06
Competitive mobile rig
utilization(2)......... 71.6% 75.9% 78.5% 81.0% 75.5% 76.6% 76.7% 80.6% 70.3% 73.6% 81.8% 85.2%
Offshore service
vessels(3)
Utilization......... 83.9% 88.6% 89.0% 91.2% 88.6% 83.9% 91.6% 94.6% 84.2% 89.7% 91.7% 94.8%
Day rates........... $3,050 $3,233 $3,700 $4,050 $3,717 $3,200 $3,033 $3,258 $2,917 $2,975 $3,307 $3,543
Anchor handling
tug/supply vessels
utilization(4)......... 71.0% 82.6% 82.6% 88.6% 85.0% 74.7% 76.3% 92.3% 86.0% 81.5% 92.6% 92.5%
<CAPTION>
1996
------
Q1
<S> <C>
Natural gas
prices(1).............. $ 3.44
Competitive mobile rig
utilization(2)......... 83.3%
Offshore service
vessels(3)
Utilization......... 95.3%
Day rates........... $3,793
Anchor handling
tug/supply vessels
utilization(4)......... 94.9%
</TABLE>
- -----------------------
(1) Average monthly natural gas cash price delivered at Henry Hub in $/MMBtu, as
reported in Natural Gas Week.

(2) Includes all jack-up rigs, semi-submersible rigs, submersible rigs,
drillships, and other mobile rig units operating in the Gulf of Mexico, as
compiled by Offshore Data Services.

(3) Includes all supply boats, crew boats, and other offshore service vessels
greater than or equal to 150 feet in length operating in the Gulf of Mexico,
as compiled by Offshore Data Services.

(4) Includes all anchor handling tug/supply vessels operating in the Gulf of
Mexico, as compiled by Offshore Data Services. Day rates are not included as
they are not considered meaningful (i.e., tugs work on a per-job basis, not
a daily basis).

During the fourth quarter of 1995 and continuing into the first quarter of
1996, both oil and natural gas prices increased as a result of strong demand for
energy.

Offshore and Harbor Towing. Offshore and harbor towing services are provided
by tugs to vessels utilizing the ports in which the tugs operate and to vessels
at sea to the extent required by environmental regulations, casualty, or other
emergency. The Company's anchor handling tug/supply boats and offshore
towing-equipped tugs have been engaged in towing a wide variety of barges
carrying heavy equipment, refinery modules, and petroleum products for the
energy industry in the Gulf of Mexico, the Atlantic Ocean, and the Mediterranean
Sea. In the case of docking services, charges are based on a fixed rate per job,
and in the case of towing services, on hourly or daily rates. In most ports,
competition is unregulated, although a few port authorities--including Port
Canaveral and Port Everglades, Florida where a majority of the Company's tugs
operate--grant non-exclusive franchises to harbor tug operators. Rates are
unregulated in franchised ports served by the Company. See "--Customers and
Charter Terms." Each port is generally a distinct market for harbor tugs, even
though harbor tugs can be moved from port to port. Demand for towing services
depends on vessel traffic, which is in turn generally dependent on local and
national economic conditions. OPA 90 and current state legislation require oil
tankers to be escorted in and around certain ports located in Alaska and the
U.S. Pacific coast. The Company anticipates that such regulatory requirements
will be expanded, increasing the demand for specially designed tractor tugs,
such as the Broward, to perform active escort services.

MARINE TRANSPORTATION SERVICES

Chemical Transportation. In the domestic chemical transportation trade,
vessels carry chemicals primarily from chemical manufacturing plants and storage
tank facilities along the Gulf of Mexico coast to industrial users in and around
the Atlantic and Pacific coast ports and along inland rivers and waterways. The
chemicals primarily transported are caustic soda, alcohols, chlorinated
solvents, paraxyzlene, alkylates, toluene, methyl tertiary butyl ether (MTBE),
phosphoric acid, and lubricating oils. Since 1989, coastwise chemical tonnage
demand has increased as a result of the general expansion of the U.S. economy
and as gasoline additives have begun to move coastwise. Certain of the chemicals
transported must be carried in vessels with specially coated or stainless steel
cargo tanks. Many are very sensitive to contamination and require special
cargo-handling equipment.
36
<PAGE>

The Company estimates that approximately 11% (in terms of tonnage) of bulk
domestic chemical transportation is waterborne, with the remainder transported
by rail. The Company also estimates that approximately 60% of that waterborne
trade is in specialty chemicals, such as caustic soda, which can be transported
only by specially designed vessels. Although chemical carriers and petroleum
product carriers are similar in design, vessels engaged in the transportation of
petroleum products generally lack the large number of small tanks, special tank
coatings, and sophisticated cargo-handling capability necessary to operate in
the parcel or specialty chemical trade. Parcel shipments are usually carried
pursuant to contracts of affreightment by which a shipper contracts for the use
of a portion of a vessel's cargo capacity. See "--Customers and Charter Terms."

Vessels engaged in domestic chemical transportation that are owned by major
chemical or other companies that use the vessels to transport cargoes for their
own accounts are referred to as "captive" or proprietary vessels. Management
believes that there are 13 specialty chemical carriers active in the domestic
trade, of which nine are non-proprietary, or independently operated, and four
are proprietary. Some of these vessels also transport petroleum products, and
all but one of them will be ineligible to do so after the year 2015 in
accordance with OPA 90 double-hull requirements. See "--Environmental and Other
Regulation--Clean Water Regulations." The Seabulk America is the only chemical
carrier to enter service in the domestic trade since 1984, and no new specialty
chemical carriers are currently under construction. In addition to the specialty
chemical tankers, there are 44 tankers and 90 barges in the U.S.-flag domestic
fleet over 10,000 gross tons that are capable of carrying some so-called "easy
chemicals," such as gasoline additives (e.g. MTBE), and that compete with
specialty chemical carriers for the transportation of those chemicals.

The following tables set forth certain information concerning mandatory OPA
90 retirement dates (from transportation of petroleum products) for the 13
active specialty chemical carriers eligible to participate in the U.S. domestic
trade. The Company believes that certain of these vessels will be retired once
they are no longer able to augment their cargoes with petroleum products and
that some may be retired in advance of their OPA 90 retirement dates as required
capital investments may not be economically justifiable over the remaining lives
of the vessels.

<TABLE>
<CAPTION>
OPA 90
YEAR BUILT/ RETIREMENT DEADWEIGHT
VESSEL NAME OWNER/OPERATOR REBUILT DATE TONS (000'S)
<S> <C> <C> <C> <C>
Keystone Georgia(1)......... Keystone Shipping Co. 1964 1998 26.3
OMI STAR.................... HVIDE MARINE(2) 1970 2000 37.5
Marine Chemist.............. Marine Transport Lines 1970 2000 35.9
Guadalupe................... Sabine/Kirby Corp. 1945/1978 2003 30.4
Chilbar..................... Keystone Shipping Co. 1959/1981 2006 39.4
SEABULK MAGNACHEM........... HVIDE MARINE 1977 2007 39.3
OMI DYNACHEM................ HVIDE MARINE(2) 1981 2011 50.9
OMI HUDSON.................. HVIDE MARINE(2) 1981 2011 50.9
SeaRiver Charleston(1)...... SeaRiver Maritime 1983 2011 48.1
SeaRiver Wilmington(1)...... SeaRiver Maritime 1984 2012 48.0
Sea Venture................. Atlantic Tankships 1972/1983 2013 18.7
SEABULK AMERICA............. HVIDE MARINE 1975/1990 2015 46.3
Chemical Pioneer(1)......... Marine Transport Lines 1968/1983 n/a(3) 34.9
-----
Total capacity...... 508.2
-----
-----
</TABLE>

- -----------------------
Source: Lloyd's Maritime Directory 1994 (for owner/operators, year
built/rebuilt, and deadweight tons); U.S. Maritime Administration (for
OPA 90 retirement dates)
(1) Proprietary.
(2) One of the OMI Chemical Carriers to be acquired. See "--The Acquisitions."
(3) Double-hull vessel.

37
<PAGE>
Although single-hull chemical carriers may be permitted to continue to carry
chemicals in the U.S. domestic and foreign trade after their OPA 90 retirement
dates, the Company believes that the inability of single-hull carriers to
augment chemical cargoes with petroleum products (such as lubricating oils)
after such dates will, in light of the current near balance between supply and
demand and increasing chemical shipment volume as a result of improvements in
the economy, result in increased charter rates for the Company's chemical
carriers.

Petroleum Product Transportation. In the domestic energy transportation
trade, oceangoing and inland-waterway vessels transport fuel and other petroleum
products, primarily from the Gulf of Mexico coast refineries and storage
facilities, to utilities, waterfront industrial facilities, and distribution
facilities along the Gulf of Mexico, the Atlantic and Pacific coasts, and inland
rivers. The inventory of U.S.-flag oceangoing vessels eligible to participate in
the U.S. domestic trade and capable of transporting fuel or petroleum products
has steadily decreased since 1980 as vessels have reached the end of their
useful lives and the cost of constructing a vessel in the United States (a
requirement for U.S. domestic trade participation) has exceeded the level at
which it was economically feasible to order a new vessel.

The following graph sets forth the projected number of U.S.-flag chemical
and product tankers from 20,000 dwt to 55,000 dwt remaining eligible to
transport crude oil and petroleum products in the U.S. domestic trade as of the
dates indicated:

OPA 90 RETIREMENT OF JONES ACT TANKERS

[GRAPH]

- -----------------------
Source: Keith Chartering

(1) Assumes delivery of twelve vessels from 1997 through 2004, including
delivery in 1998 of the five petroleum product carriers in which the Company
has an interest, and scrap dates one year in advance of OPA 90 mandated
retirement dates.

As a result of the retirement dates for single-hull tankers mandated by OPA
90, the Company believes that, of the 71 U.S.-flag product and chemical carriers
and product and chemical barges from 20,000 dwt to 55,000 dwt currently
operating, 19 will have to be retired by the end of year 2000. See
"--Environmental and Other Regulation--Clean Water Regulations." Replacement
vessels currently under construction consist of four late 1950s-built
steam-powered single-hull product carriers being converted to double-hull
vessels for delivery in 1996 and 1997 and the five new diesel-powered double-
hull product carriers in which the Company has an interest. See "--Company
Operations--Marine Transportation Services--Petroleum Product
Transportation--New Product Carriers." The Company believes that the mandatory
replacement of single-hull carriers by environmentally safer double-hull vessels
will result in a gradual increase in charter rates for product carriers over the
next few years.

38
<PAGE>
COMPANY OPERATIONS

MARINE SUPPORT SERVICES

Offshore Energy Support. The Company has provided services to the oil and
gas drilling industry since 1989, when it acquired its first eight offshore
supply boats. In September 1994, March 1995, and January and February 1996, the
Company expanded its offshore energy support service fleet by acquiring an
aggregate of six supply boats and two utility boats (seven of which it was
previously operating or managing) and 36 crew boats. The Acquisitions will add
ten supply boats and two crew boats.

____Supply Boats. The Company's 24 supply boats, including those to be acquired
following completion of the Offering as part of the Acquisitions, are as
follows:

<TABLE>
<CAPTION>
LENGTH YEAR BUILT/ AREA OF
SUPPLY BOAT NAME (FEET) REBUILT HORSEPOWER OPERATION
<S> <C> <C> <C> <C>
Baltic Seal(1)................................. 205 1976/1994 2,250 U.S. Gulf
Indian Seal(1)(2).............................. 205 1974/1994 5,350 U.S. Gulf
Seabulk North Carolina(2)(3)................... 190 1979/1993 4,000 U.S. Gulf
Baffin Seal(1)................................. 185 1982/1994 2,250 U.S. Gulf
Pegasus Seal(1)................................ 185 1982 2,250 U.S. Gulf
Hawke Seal(1).................................. 185 1982 2,250 U.S. Gulf
Bengal Seal(1)................................. 185 1979 2,250 North Sea
Seabulk Hawaii................................. 180 1979/1995 3,000 U.S. Gulf
Seabulk Georgia................................ 180 1984 3,000 U.S. Gulf
Seamark South Carolina(2)(4)................... 180 1983 3,000 SE Asia
Seabulk California............................. 180 1982 2,250 U.S. Gulf
Seabulk Florida................................ 180 1982 2,250 U.S. Gulf
Seabulk Alabama................................ 180 1982 2,250 U.S. Gulf
Seamark Mississippi(4)......................... 180 1982 2,250 SE Asia
Seabulk Texas.................................. 180 1982 2,250 U.S. Gulf
Seabulk Louisiana.............................. 180 1982 2,250 U.S. Gulf
Ross Seal(1)................................... 176 1977/1987 1,700 SE Asia
China Seal(1).................................. 176 1977 1,700 North Sea
Intersurf(5)................................... 175 1983 2,400 U.S. Gulf
Big Orange XXII(5)............................. 175 1983 2,400 U.S. Gulf
Seabulk Oregon................................. 175 1979 2,250 U.S. Gulf
Seabulk Washington............................. 175 1978 2,250 U.S. Gulf
Seabulk Maryland(3)............................ 165 1980 1,860 U.S. Gulf
Seabulk Virginia(3)............................ 165 1979 1,860 U.S. Gulf
</TABLE>

- -----------------------
(1) To be acquired from Seal Fleet. See "--The Acquisitions."

(2) Anchor handling tug/supply vessel.

(3) The Company is bareboat charterer and operator with an option to purchase
the vessel at the end of the bareboat charter for a nominal amount.

(4) These offshore supply boats are currently chartered to a joint venture in
which the Company has a 49% interest and are operated by the joint venture
in Southeast Asia. The Company receives bareboat charter hire, which is at a
rate that is approximately equivalent to the capital costs of the vessels,
and the right to receive a 49% share of net income from the venture. The
joint venture has the right to purchase each vessel for $300,000 upon
expiration of the charters in 1998.

(5) To be acquired from IMI Marine. See "--The Acquisitions."

39
<PAGE>
____Crew boats. The 37 crew and two utility boats currently owned, operated, or
to be acquired in the Acquisitions by the Company, all of which are operated in
the Gulf of Mexico, are as follows:

<TABLE>
<CAPTION>
LENGTH YEAR BUILT/
CREW BOAT NAME (FEET) REBUILT HORSEPOWER
<S> <C> <C> <C>
Seabulk St. Francis(1)....................................... 152 1996 4,400
Seabulk St. Charles(2)....................................... 152 1993 3,820
Seabulk Winn................................................. 135 1991 3,056
Big Blue..................................................... 135 1990 3,056
Storm Runner................................................. 135 1990 3,056
Sea Robin III................................................ 135 1978 2,250
Seabulk LaFourche............................................ 130 1991 2,040
Carol(1)..................................................... 125 1985 2,600
Thunderuniverse.............................................. 125 1985 2,040
Seabulk Starr................................................ 120 1984 2,040
ThunderU.S.A................................................. 120 1984 2,040
Nautic Runner................................................ 120 1980 2,040
Seabulk Liberty.............................................. 110 1985 2,040
Thunderplanet................................................ 110 1982 2,040
Seabulk Mobile............................................... 110 1982 2,040
Thunderroad.................................................. 110 1981 2,040
Thunderwar................................................... 110 1981 2,040
Thunderworld................................................. 110 1980 2,040
Seabulk Bay.................................................. 110 1980 2,040
Seabulk Beauregard........................................... 110 1980 2,040
Seabulk Jackson.............................................. 110 1980 2,100
David Jr.(3)................................................. 110 1980 2,820
Jillian(3)................................................... 110 1980 2,820
Seabulk Nassau............................................... 110 1979 2,040
Seabulk Aransas.............................................. 110 1978 2,100
Ralph Thompson(3)............................................ 110 1978 2,820
Buster Thompson(3)........................................... 110 1978 2,820
Seabulk Austin(4)............................................ 110 1978 1,080
Billy Jay(3)................................................. 110 1976 2,400
Judy L.(3)................................................... 110 1975 2,400
Seabulk Baton Rouge(3)(4).................................... 100 1981 910
Thundereagle................................................. 100 1977/1995 1,530
Seabulk Cameron.............................................. 100 1976/1995 1,530
Thundercat................................................... 100 1976/1995 1,530
Seabulk Sabine............................................... 100 1976/1995 1,530
Gulf Runner II............................................... 100 1981 1,530
Seabulk Iberia............................................... 100 1981 1,530
Rig Runner(3)................................................ 90 1974 1,650
Cheryl....................................................... 85 1976 1,200
</TABLE>

- -----------------------
(1) Vessel to be acquired. See "--The Acquisitions."

(2) The Company is bareboat charterer and operator with an option to purchase
the Seabulk St. Charles, formerly the Royal Runner, at the end of the
bareboat charter for $400,000.

(3) The Company is bareboat charterer and operator with an option to purchase
the vessel at the end of the bareboat charter for a nominal amount.

(4) Utility vessel.

40
<PAGE>
Offshore and Harbor Towing. The Company's 11 tugs serve Port Everglades and
Port Canaveral, Florida and Mobile, Alabama, where they primarily assist product
carriers, barges, other cargo vessels, and cruise ships in docking and undocking
and in proceeding in confined waters.

____Port Everglades. Port Everglades has the third largest petroleum storage
tank farm in the United States, providing substantially all of the petroleum
products for South Florida. Since 1958, when the Company's tug operations were
established, the Company has enjoyed a franchise as the sole provider of docking
services in the port. That franchise specifies, among other things, that three
tugs serving the port be less than 90 feet in length, because of the narrowness
of slips in the port, and that tugs have firefighting capability. The franchise
is not exclusive and another operator could be granted an additional franchise.
Although a significantly larger potential competitor sought a franchise in 1992,
the Company won unanimous endorsement from the Port Authority to continue its
sole-franchise relationship with the port when that competitor failed to make
the requisite showing of public need and necessity. The current franchise
expires in 2001, and there can be no assurance that it will be renewed.

In 1995, the Company took delivery of a new 5,100 hp tractor tug, the
Broward, which has been operated in Port Everglades. The Broward was built at a
cost of approximately $6.4 million. Company personnel, working in conjunction
with consulting marine engineers and architects, prepared the conceptual design,
including the tug's distinctive hull form, prepared detailed specifications, and
supervised the construction of the tug.

Tractor tugs have forward-mounted, omni-directional propulsion units, giving
them a high degree of maneuverability and control over the operation of an
escorted oil tanker or other vessel, and are generally considered superior for
tanker escort service. The Broward has twin 2,550 hp diesel engines and twin
propeller nozzles capable of turning 360 degrees. Although all of the Company's
harbor tugs are equipped for firefighting and their crews trained to respond to
fires and oil-spill emergencies, the Broward has significantly enhanced
firefighting capabilities, with two large water cannons capable of producing
6,000 gallons per minute for spraying water or foam. Although a number of
tractor tugs are in operation around the world, there are no others in
commercial service in the southeastern United States. As a result of the
delivery of the Broward, the Company intends to offer tanker escort services and
specialized offshore energy support services.

____Port Canaveral. The Company expanded its services in the early 1960s to Port
Canaveral, Florida where, like Port Everglades, it also has the sole franchise
from the port authority to provide harbor docking services. Port Canaveral is
the smallest of the Company's harbor tug operations, providing docking and
undocking services for commercial cargo vessels serving central Florida and for
cruise ships visiting the Disney World/Kennedy Space Center attractions. The
Company's franchise is a month-to-month arrangement and, although there can be
no assurance that the Company will be able to retain its franchise in Port
Canaveral, there has been no challenge to the franchise since 1984.

____Mobile. In 1988, the Company purchased a division of a towing company
operating in the port of Mobile, Alabama. The port provides docking and
undocking services primarily for commercial cargo vessels, including vessels
transporting coal and other bulk exports. At the time, that division operated
three harbor tugs in Mobile and had an approximate 30% market share. The Company
added additional equipment and believes it significantly upgraded the quality
and performance of the tug service, thus enabling the Company to increase its
market share to approximately 50% of the harbor tug business in that port since
commencing operations.

____Offshore Towing. Three of the Company's 11 tugs are offshore towing equipped
and conduct a wide variety of offshore towing activities in the Atlantic Ocean
and Gulf of Mexico.

41
<PAGE>
The Company currently owns and operates the following tugs engaged in
providing towing services:

<TABLE>
<CAPTION>
LENGTH YEAR BUILT/ CURRENT
VESSEL NAME HORSEPOWER (FEET) REBUILT PORT SERVED
<S> <C> <C> <C> <C>
Broward(1).................................. 5,100 100 1995 Everglades
Ft. Lauderdale.............................. 4,200 90 1971/1996 Everglades
Hollywood................................... 4,200 106 1985 Mobile
Mobile Power................................ 4,100 98 1957/1986 Mobile
Mobile Pride(1)............................. 3,300 107 1969/1989 Mobile
Paragon(1).................................. 3,300 105 1978/1989/1996 Offshore
Mobile Persistence.......................... 3,000 98 1940/1975 Canaveral
Brevard..................................... 2,400 88 1945/1986/1996 Canaveral
Captain Brinn............................... 2,145 88 1960/1986 Canaveral
Everglades.................................. 2,145 88 1956/1984 Everglades
Manatee..................................... 2,145 88 1959/1982 Everglades
</TABLE>

- -----------------------
(1) Equipped for offshore towing.

MARINE TRANSPORTATION SERVICES

Chemical Transportation.

____Existing Vessels. The Company's two existing chemical carriers, the
298,000-barrel, 39,300 dwt Seabulk Magnachem and the 297,000-barrel, 46,300 dwt
Seabulk America, are primarily engaged in the U.S. domestic chemical parcel
trade. The Company operates the Seabulk Magnachem pursuant to a long-term
bareboat charter. See "Description of Certain Indebtedness--Long-Term Charter
Obligations--Title XI Bonds." The Company owns a 67% economic interest in the
Seabulk America and Stolt Tankers (U.S.A.), Inc. owns a 33% economic interest in
the Seabulk America.

The Seabulk Magnachem and the Seabulk America have full double bottoms (as
distinct from double hulls) and 16 and 24 cargo segregations, respectively,
enabling each vessel to carry a variety of different chemical products on a
particular voyage. Many of the chemicals transported by the Company are
hazardous substances. Voyages are currently generally conducted from the Houston
and Corpus Christi, Texas, and Lake Charles, Louisiana areas to such ports as
New York, Philadelphia, Baltimore, Norfolk, Wilmington, North Carolina, and
Charleston, South Carolina.

Delivered in 1977, the Seabulk Magnachem is a CATUG(R) ITB, which requires
fewer personnel to operate than a conventional carrier of equivalent size and
has a higher level of dependability, propulsion efficiency, and performance than
an ordinary tug and barge. Delivered in 1990, the Seabulk America is the only
vessel in the U.S. domestic trade capable of carrying large cargoes of acid, as
a result of its large high-grade alloy stainless steel tanks, and the only such
vessel strengthened to carry relatively heavy cargoes such as phosphoric and
other acids. The Seabulk America's stainless steel tanks were constructed
without internal structure, which greatly reduces cargo residue from
transportation and results in less cargo degradation. Stainless steel tanks,
unlike epoxy-coated tanks, also do not require periodic sandblasting and
recoating. The Seabulk America was one of the first U.S.-flag carriers to be
equipped with state-of-the-art integrated navigation, cargo control monitoring,
and automated engine room equipment.

Pursuant to the requirements of OPA 90, the Seabulk America and Seabulk
Magnachem, which were built with full double bottoms but not double sides,
cannot be utilized to transport petroleum and petroleum products in U.S.
commerce after 2015 and 2007, respectively. See "--Environmental and Other
Regulation--Clean Water Regulations." They may, however, be permitted to
continue to carry

42
<PAGE>
certain chemicals in U.S. commerce and may be redocumented in another country
and transport chemicals in non-U.S. trades. Although it has no current plans to
do so, the ITB design of the Seabulk Magnachem would allow the Company to
replace only the cargo-carrying portion of the vessel with a double-hull barge,
which the Company anticipates would be substantially less expensive than
constructing an entirely new double-hull conventional tank vessel.

The OMI Chemical Carriers. The three OMI Chemical Carriers, the
-------------------------
360,000-barrel, 50,900 dwt OMI Dynachem, the 360,000-barrel, 50,900 dwt OMI
Hudson, and the 260,000-barrel, 37,100 dwt OMI Star, have from 13 to 24
individual cargo tanks configured, strengthened, and coated to handle various
sized parcels of a wide variety of industrial chemical and petroleum products
giving them the ability to handle a broader range of chemicals than
chemical-capable product carriers. The OMI Dynachem and the OMI Hudson have full
double bottoms and are diesel powered; the OMI Star has a partial double bottom
and is steam powered. Double bottoms provide increased protection over single
hull vessels from a spill in the event of mishap. The OMI Dynachem, the OMI
Hudson, and the OMI Star cannot transport petroleum and petroleum products in
U.S. commerce after 2011, 2011, and 2000, respectively, although like the
Seabulk Magnachem and Seabulk America, they may thereafter transport certain
chemicals in U.S. and non-U.S. commerce.

Unlike the Company's existing fleet, the OMI Chemical Carriers are manned by
members of national maritime labor unions pursuant to collective bargaining
agreements. The Company's crewing
agent has reached agreement with the unions on a new collective bargaining
agreement on terms comparable to the terms of the existing agreement.

OSTC. OSTC is currently 50% owned by each of the Company and OMI. The
----
Seabulk America and Seabulk Magnachem, along with the three OMI Chemical
Carriers, are currently time chartered to and marketed by OSTC. Under the pool
arrangement, the Company receives charter hire from OSTC based upon a formula
which takes into account the speed and carrying capacity of the vessels and
other factors applied to OSTC's revenues (net of fuel costs, port charges, and
overhead).

Following its acquisition of the OMI Chemical Carriers and OMI's 50%
interest in OSTC, the Company intends to continue to market the five chemical
carriers through OSTC. The total capacity of the five carriers operated under
the OSTC pool arrangement represents approximately 44% of the capacity of the
independent domestic specialty chemical carrier fleet, and four of the five
chemical carriers marketed by OSTC are among the most recently built and the
only independently owned, diesel-powered carriers with full double bottoms
operating in the U.S. domestic trade. See "--The Industry--Marine Transportation
Services--Chemical Transportation."

OSTC books cargoes either on a spot (movement-by-movement) or time basis.
Approximately 75% of contracts for cargo are committed on a 12- to 18-month
basis, with minimum and maximum cargo tonnages specified over the period at
fixed rates per ton. The OMI Hudson and OMI Star are currently chartered to
major oil companies under charters that expire in August 1997 and November 1996,
respectively, assuming charter extension options are not exercised (November
1998 for the OMI Star if certain options are exercised). Due to the flexibility
of the pool, OSTC is often able to generate additional revenues by chartering
cargo space on competitors' vessels and by expanding the pool carriers' backhaul
(return voyage) opportunities.

43
<PAGE>
Petroleum Product Transportation.

____Seabulk Challenger. The 320,000-barrel, 39,300 dwt CATUG(R) ITB Seabulk
Challenger is engaged in the transportation of fuel and other petroleum products
from Shell's refineries in Texas and Louisiana to tank farms and industrial
sites primarily in Port Everglades, Tampa, and Jacksonville, Florida. Delivered
in 1975, the Seabulk Challenger has six cargo segregations and was the first
CATUG(R) ITB constructed in the world. Like the Seabulk Magnachem, it enjoys
certain manning and other advantages over conventional tank vessels. In 1989 and
1991, the vessel had extensive steel renewals and tank recoatings. In addition,
in 1991 the vessel was outfitted with an inert-gas system at the expense of the
charterer.

The Seabulk Challenger has been under continuous contract to Shell since its
delivery in 1975 and to date has performed over 600 voyages for Shell. In
January 1990, Shell renewed the charter for a ten-year period ending in January
2000. Under the charter, the Company is responsible for operating costs such as
crew, maintenance, and insurance, and Shell pays for voyage costs such as fuel
and port charges. The charter hire rate is adjusted annually for inflation. The
charter may be canceled by Shell in January 1997 and each subsequent January
upon payment of a percentage of the charter hire due over the remaining term of
the charter. Shell has in the past repeatedly renewed its charter of the Seabulk
Challenger, and continues to fully utilize the vessel. Because the termination
penalties are substantial, and Shell has provided significant capital
enhancement to the vessel, the Company believes that Shell will continue to
charter the vessel until January 2000, although there can be no assurance that
it will do so.

The Seabulk Challenger, like the Company's chemical carriers and single-hull
barges, cannot be operated in U.S. waters after its January 2003 phase-out date
under OPA 90. As with the Seabulk Magnachem, the Company could, but has no
current plans to, replace the barge portion of the Seabulk Challenger with a
double-hull barge, which the Company anticipates would be substantially less
expensive than constructing an entirely new double-hull conventional tank
vessel.

____Sun State. In September 1994, the Company acquired the marine assets of Sun
State Marine, Inc. ("Sun State"), which then owned and operated an energy
transportation fleet of ten towboats and eight fuel barges (one small barge was
acquired in April 1995 and four small barges were acquired in December 1995),
all of which are engaged in fuel transportation along the Atlantic intracoastal
waterway and in the St. Johns River in Florida. Sun State has been in operation
for over 50 years, and the Company continues to operate it as a wholly-owned
subsidiary.

A majority of Sun State's revenue for the year ended December 31, 1995 was
derived from a fuel transportation contract with FPL. The remainder of its
revenue was derived from a fuel transportation contract with another customer
and its marine maintenance, repair, and drydocking facility. See "--Other
Services." Under its contract with FPL, which has a term extending to September
1998, Sun State has agreed to transport fuel oil from Port Canaveral and
Jacksonville to certain FPL electric power generating facilities at specified
rates (a combination of per diem and variable rates based upon barrels
transported) with an escalation provision. The FPL contract has a specified
guaranteed minimum utilization provision.

44
<PAGE>
The Sun State towboats are as follows:

<TABLE>
<CAPTION>
HORSE- LENGTH YEAR BUILT/
VESSEL NAME POWER (FEET) REBUILT
<S> <C> <C> <C>
Sun River City................................................... 1,000 72 1994
Sun Commander.................................................... 1,000 70 1968/1990
Sun Chief........................................................ 1,000 72 1971/1990
Sun Merchant..................................................... 1,000 65 1966/1994
Sun Trader....................................................... 850 56 1972/1980
Sun St. Johns.................................................... 850 58 1961/1990
Sun Explorer..................................................... 800 57 1980
Sun Gypsy........................................................ 800 53 1976/1992
Sun Rebel........................................................ 800 60 1957/1991
Sun Venture...................................................... 800 66 1956/1986
</TABLE>

The Sun State barges are as follows:

<TABLE>
<CAPTION>
BARGE LENGTH YEAR BUILT/
VESSEL NAME CAPACITY (FEET) REBUILT
<S> <C> <C> <C> <C>
Sun State No. 1............................................ 25,684 bbls 290 1952/1994
Sun State No. 2............................................ 25,684 bbls 290 1952/1979
Sun State No. 3............................................ 25,974 bbls 290 1962/1986
Sun State No. 4............................................ 25,974 bbls 290 1962/1984
Sun State No. 6............................................ 21,408 bbls 264 1950/1982
Sun State No. 7............................................ 20,700 bbls 264 1967/1990
Sun State No. 8............................................ 23,000 bbls 272 1970
Sun State No. 9............................................ 23,000 bbls 272 1970
Sun State 501.............................................. 4,880 bbls 126 1966
Sun State 701.............................................. 7,000 bbls 175 1942
Sun State 901.............................................. 9,000 bbls 177 1948
Sun State 902.............................................. 9,500 bbls 195 1947
Sun State 1101............................................. 11,000 bbls 200 1963
</TABLE>

OPA 90 requires all single-hull barges, including the Sun State barges, to
discontinue transporting fuel and other petroleum products in 2015.

____New Product Carriers. The Company has a 2.4% equity interest in five 45,300
dwt petroleum product carriers currently under construction by Newport News
Shipbuilding and Drydock Co. for delivery during 1998. The aggregate cost of the
five carriers is estimated to be $255.0 million, of which approximately $40.0
million will constitute equity investment and $215.0 million will be financed
with the proceeds of government-guaranteed Title XI ship financing bonds issued
in March 1996. In addition to the Company's interest, 25% of the equity interest
in the vessels is held by Van Ommeren International BV and 49.3% and 23.4%,
respectively, by two other investors. Subject to certain conditions, the Company
has an option, exercisable through 2002, to purchase the 49.3% interest at a
price equal to (i) the investor's equity investment plus a stated annual return,
or (ii) if exercised after December 31, 1997, the greater of the fair market
value of the interest or the amount set forth in (i). The Company also has an
option, exercisable on January 15, 1998, to purchase the additional 23.4%
interest at a price equal to the investor's equity investment plus a stated
return. Should the Company fail to exercise the latter option, the investor has
the option to acquire 1.6% of the ownership interest from the Company for
nominal consideration. The total estimated cost of exercising the Company's
options is up to $32.0 million (assuming the options are exercised prior to
January 1, 1998). The Company currently has no understandings or agreements with
respect to the financing that it would require if it were to exercise any or all
of these options, and there can be no assurance that such financing will be
available.

45
<PAGE>
The five product carriers, the operations of which will be managed by the
Company, are double-hull carriers intended to serve the market currently served
by single-hull product carriers whose retirement is mandated by OPA 90. The
vessels, scheduled for delivery in 1998, will operate in the U.S. domestic trade
and may be operated pursuant to long- or short-term charters, depending upon
market conditions during the period prior to their delivery and thereafter. The
Company is serving as the construction supervisor during the construction
period. The construction project is currently the subject of litigation. See
"--Legal Proceedings."

OTHER SERVICES

As part of the Sun State acquisition, the Company also acquired a small
marine maintenance, repair, and drydocking facility in Green Cove Springs,
Florida, which is engaged principally in the maintenance of tugs and barges,
offshore support vessels, and other small vessels. The lease for the facility,
including options, expires in 2000. The towboat Sun River City was constructed
in the Green Cove Springs facility, which is capable of drydocking vessels up to
300 feet in length for repair and can make dockside repairs on vessels up to 320
feet in length. Since October 1994, the Green Cove Springs facility has been
utilized to overhaul or rebuild a number of the Company's harbor tugs and
offshore energy support vessels. The facility (originally a U.S. government
naval repair and operations station) has covered steel fabrication facilities,
workshops, and office spaces adjacent to a 1,840-foot finger pier and mooring
basins, where the facility's three floating drydocks are located. The drydocks
are 60, 80, and 108 feet in length, and are capable of lifting 350, 200, and 500
tons, respectively. The 60 and 108 foot drydocks are capable of being joined
together for lifting a vessel or barge with a nominal capacity of 1,175 long
tons.

CUSTOMERS AND CHARTER TERMS

The Company offers its offshore energy support services primarily to oil
companies and large drilling companies. Consistent with industry practice, the
Company's Gulf of Mexico operations are conducted primarily in the "term" market
pursuant to short-term (less than six months) charters at varying day rates.
Generally, such short-term charters can be terminated by either the Company or
its customer upon notice of five days or less.

The Company offers its offshore and harbor towing services to vessel owners
and operators and their agents. The Company's rates for harbor towing services
are set forth in the Company's published tariffs and are subject to modification
by the Company at any time, limited by competitive factors. The Company also
grants volume discounts to major users of harbor services. Offshore towing
services are priced based upon the service required on an ad hoc basis.

The primary purchasers of chemical transportation services are chemical and
oil companies. The primary purchasers of petroleum product transportation
services are utilities, oil companies, and large industrial consumers of fuel
with waterfront facilities. Both services are generally contracted for on the
basis of short-term or long-term time charters, voyage charters, contracts of
affreightment, or other transportation agreements tailored to the shipper's
requirements. Shell, the Company's largest single customer and the long-term
charterer of the Company's product carrier, accounted for between 10% and 15% of
the Company's 1995 revenues (less than 10% on a pro forma basis assuming the
Acquisitions had occurred on January 1, 1995). FPL, the Company's second largest
customer, accounted for between 5% and 10% of the Company's 1995 revenues (less
than 5% on a pro forma basis assuming the Acquisitions had occurred on January
1, 1995). The loss of either of these customers could have a material adverse
effect on the Company. See "Business--Customers and Charter Terms."

COMPETITION

The Company operates in a highly competitive environment in all its
operations. The principal competitive factors in each of the markets in which
the Company operates are suitability of equipment, personnel, price, service,
and reputation. The Company's vessels that provide chemical and petroleum
products transportation services compete with both other vessel operators and,
in some areas and

46
<PAGE>
markets, with alternative modes of transportation, such as pipelines, rail tank
cars, and tank trucks. Moreover, the users of such services are placing
increased emphasis on safety, the environment, and quality, partly due to
heightened liability for the cargo owner in addition to the vessel
owner/operator under OPA 90. See "--Environmental and Other Regulation--Clean
Water Regulations." With respect to towing services, the Company's vessels
compete not only with other providers of tug services, but with the providers of
tug services in nearby ports. Many of the companies with which the Company
competes have substantially greater financial and other resources than the
Company. Additional competitors may enter the Company's markets in the future.
Moreover, should U.S. coastwise laws be repealed, foreign-built, foreign-manned,
and foreign-owned vessels could be eligible to compete with the Company's
vessels. See "--Environmental and Other Regulation--Coastwise Laws."

ENVIRONMENTAL AND OTHER REGULATION

The Company's operations are subject to significant federal, state, and
local regulation, the principal provisions of which are described below.

Clean Water Regulations. OPA 90 established an extensive regulatory and
liability regime for the protection of the environment from oil spills. OPA 90
affects all owners and operators of vessels in United States waters, which
include the United States territorial sea and the 200-mile exclusive economic
zone of the United States. Although it applies in general to all vessels, for
purposes of its liability limits and financial-responsibility and
response-planning requirements, OPA 90 differentiates between tank vessels
(which include the Company's chemical carriers, product carrier, and fuel
barges) and "other vessels" (which include the Company's tugs and offshore
energy service vessels).

Under OPA 90, owners, operators, and certain charterers of vessels are
"responsible parties" and are jointly, severally, and strictly liable for
containment and cleanup costs and other damages arising from oil spills relating
to their vessels, unless the spill results solely from the act or omission of a
third party, an act of God, or an act of war. Such "other damages" are defined
broadly to include (i) natural resources damages and the costs of assessment
thereof; (ii) damages for injury to, or economic losses resulting from the
destruction of, real and personal property; (iii) net loss of taxes, royalties,
rents, fees, and other lost revenues by the U.S. government, a state, or
political subdivision thereof; (iv) lost profits or impairment of earning
capacity due to property or natural resources damage; (v) net cost of public
services necessitated by a spill response, such as protection from fire or other
hazards; and (vi) loss of subsistence use of natural resources.

For tank vessels, the statutory liability of responsible parties is limited
to the greater of $1,200 per gross ton or $10 million ($2 million for a vessel
of 3,000 gross tons or less) per vessel; for "other vessels," such liability is
limited to the greater of $600 per gross ton or $500,000 per vessel. Such
liability limits do not apply, however, to an incident proximately caused by
violation of federal safety, construction, or operating regulations or by the
responsible party's gross negligence or willful misconduct, or if the
responsible party fails to report the incident or to cooperate and assist in
connection with oil removal activities. Although the Company currently maintains
pollution liability insurance with coverage of $700 million per incident for its
tank vessels ($500 million per incident for its fuel barges), a catastrophic
spill could result in liability in excess of available insurance coverage,
resulting in a material adverse effect on the Company.

Under OPA 90, with certain limited exceptions, all newly built or converted
tankers operating in U.S. waters must be built with double hulls, and existing
single-hull vessels must be phased out at some point, depending upon their size,
age and place of discharge, between 1995 and 2015 unless retrofitted with double
hulls. As a result of this phase-out requirement, as interpreted by the U.S
Coast Guard, the Company's chemical carriers and its petroleum product carrier
will be required to cease transporting petroleum products over the next 19
years, and its fuel barges will cease transporting fuel in 2015.

OPA 90 expanded pre-existing financial responsibility requirements and
requires vessel owners and operators to establish and maintain with the United
States Coast Guard evidence of insurance or qualification as a self-insurer or
other evidence of financial responsibility sufficient to meet their

47
<PAGE>
potential liabilities under OPA 90. U.S. Coast Guard regulations require
evidence of financial responsibility demonstrated by insurance, surety bond,
self-insurance, or guaranty. The regulations also implement the financial
responsibility requirements of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), which imposes liability for
discharges of hazardous substances such as chemicals, by increasing the amount
of financial responsibility from $1,200 to $1,500 per gross ton. The Company has
obtained COFRs pursuant to the Coast Guard regulations for its product carrier
and for its chemical carriers through self-insurance and commercial insurance
and for the fuel barges through insurance purchased from the Water Quality
Insurance Syndicate, a syndicate of American insurance companies that insures
oil pollution liability risks. The Company intends to obtain COFRs for the OMI
Chemical Carriers in the same fashion as the existing product carrier's COFR.

OPA 90 also amended the Federal Water Pollution Control Act to require the
owner or operator of a tank vessel to prepare vessel response plans and to
contract with oil spill response organizations to remove to the maximum extent
practicable a worst-case discharge (loss of all cargo). The Company has complied
with both requirements. As is customary, the Company's oil spill response
contracts are executory in nature and are not activated unless required. Once
activated, the Company's pollution liability insurance covers the cost of spill
removal subject to overall coverage limitations and deductibles.

OPA 90 expressly permits individual states to impose their own liability
regimes with respect to oil pollution incidents occurring within their
boundaries, and many states have enacted legislation providing for unlimited
liability for oil spills. Some states that have enacted such legislation have
not yet issued implementing regulations defining tanker owners' responsibilities
under the legislation. The Company does not anticipate that such legislation or
regulations will have any material impact on its operations.

The Company manages its exposure to losses from potential discharges of
pollutants through the use of well-maintained and well-equipped vessels, safety
and environmental programs, and its insurance program, and believes that it will
be able to accommodate reasonably foreseeable environmental regulatory changes.
There can be no assurance, however, that any new regulations or requirements or
any discharge of pollutants by the Company will not have an adverse effect on
the Company.

Clean Air Regulations. The federal Clean Air Act of 1970, as amended by the
Clean Air Act Amendments of 1990, requires the Environmental Protection Agency
to promulgate standards applicable to the emission of volatile organic compounds
and other air pollutants. These standards are designed to reduce hydrocarbon
emissions released in the atmosphere and are implemented by the states through
State Implementation Plans for areas that are not in compliance with those
standards. The Company's vessels are subject to vapor control and recovery
requirements when loading petroleum cargoes in Louisiana and when loading,
unloading, ballasting, cleaning, and conducting other operations in certain
ports in Texas. The Company's chemical and petroleum product carriers, as well
as the OMI Chemical Carriers, are equipped with vapor control systems that
satisfy the state requirements. The fuel barges are not equipped with, and are
not operated in areas that require, such systems.

Coastwise Laws. Most of the Company's operations are conducted in the U.S.
domestic trade, which is governed by the coastwise laws of the United States
(principally, the Jones Act). The coastwise laws reserve marine transportation
(including harbor tug services) between points in the United States (including
drilling rigs fixed to the ocean floor in U.S. territorial waters) to vessels
built in and documented under the laws of the United States (U.S. flag) and
owned and manned by U.S. citizens. A corporation is deemed a citizen for these
purposes so long as (i) it is organized under the laws of the U.S. or a state,
(ii) each of its president or other chief executive officer and the chairman of
its board of directors is a citizen, (iii) no more than a minority of the number
of its directors necessary to constitute a quorum for the transaction of
business are non-citizens, and (iv) 75% of the interest and voting power in the
corporation are held by citizens. Because the Company would lose its privilege
of operating its vessels in the U.S. domestic trade if non-citizens were to own
or control in excess of 25% of the

48
<PAGE>
Company's outstanding capital stock, the Company's Articles of Incorporation
contain restrictions concerning foreign ownership of its stock. See "Description
of Capital Stock--Foreign Ownership Restrictions." A coalition of shipper
interests opposed to the Jones Act announced in the summer of 1995 its intention
to seek changes to the Jones Act. Although the Company believes that it is
unlikely that the Jones Act will be substantially modified or repealed, there
can be no assurance that Congress will not substantially modify the Jones Act or
repeal it. Such changes could have a material adverse effect on the Company's
operations and financial condition.

Occupational Health Regulations. The Company's vessel operations are subject
to occupational safety and health regulations issued by the Coast Guard. Such
regulations currently require the Company to perform extensive monitoring,
medical testing, and record keeping with respect to seamen engaged in the
handling of the various cargoes transported by the Company's chemical and
petroleum products carriers.

Vessel Condition. The Company's chemical and petroleum product carriers,
offshore energy support vessels, four of its tugs, and the fuel barges are
subject to periodic inspection and survey by, and drydocking and maintenance
requirements of, the Coast Guard and/or the American Bureau of Shipping, a
marine classification society whose periodic certification as to the
construction and maintenance of certain vessels is required in order to maintain
insurance coverage. All of the Company's vessels requiring certification to
maintain insurance coverage are certified.

Oil Tanker Escort Requirements. Implementation of oil tanker escort
requirements of OPA 90 and pending state legislation are expected to introduce
certain performance or engineering standards on tugs to be employed as tanker
escorts. The Company believes its tractor tug will be able to comply with any
existing or currently anticipated requirements for escort tugs. Adoption of such
new standards could require modification or refitting of the tugs currently
operated by the Company to the extent such tugs are employed as tanker escorts.
The Company does not anticipate OPA 90 or state requirements to require
modification of tugs, such as the Company's, involved in harbor tug operations.

The Company believes that it is currently in compliance in all material
respects with the environmental and other laws and regulations, including OSHA
shipyard requirements, to which its operations are subject and is unaware of any
pending or threatened litigation or other judicial, administrative or arbitral
proceedings against it occasioned by any alleged non-compliance with such laws
or regulations. The risks of substantial costs, liabilities, and penalties are,
however, inherent in marine operations, and there can be no assurance that
significant costs, liabilities, or penalties will not be incurred by or imposed
on the Company in the future.

INSURANCE

The Company's marine transportation services operations are subject to the
normal hazards associated with operating vessels carrying large volumes of cargo
or rendering services in a marine environment. These hazards include the risk of
loss of or damage to the Company's vessels, damage to third parties as a result
of collision, loss, or contamination of cargo, personal injury of employees,
pollution, and other environmental damages. The Company maintains insurance
coverage against these hazards. Risk of loss of or damage to the Company's
vessels is insured through hull insurance policies currently insuring
approximately $174 million in hull values, and approximately $262 million in
hull values upon completion of the Offering, which approximates fair market
value. Vessel operating liabilities, such as collision, cargo, environmental,
and personal injury, are insured primarily through the Company's participation
in the Steamship Mutual Underwriting Association (Bermuda Limited), a mutual
insurance association under which the coverage against such hazards is currently
unlimited for each incident except in the case of pollution, which is limited to
$700 million (the maximum amount available) for each incident involving the
Company's chemical and petroleum product carriers and $500 million with respect
to its other vessels. Because it maintains mutual insurance, the Company is
subject to funding requirements and coverage shortfalls in the event claims
exceed available funds and reinsurance and to premium increases based on prior
loss experience.

49
<PAGE>
LEGAL PROCEEDINGS

The Company is party to two legal proceedings involving its chemical carrier
Seabulk America, one involving the Company's continued ability to operate the
vessel in the U.S. domestic trade, the other involving the cost of completing
the vessel.

The Seabulk America was completed in 1990 by combining the stern portion of
the wrecked oil tanker Fuji with the forebody of the chemical barge portion of
the former integrated tug/barge Oxy Producer/Oxy 4102. The Company purchased the
stern portion of the Fuji in 1985 after the tanker had broken apart following an
explosion at sea, and had previously purchased the barge portion of the Oxy
Producer/Oxy 4102 after the tug portion separated from the barge and was lost at
sea. At the time of their respective acquisitions by the Company, neither vessel
was qualified to operate in the U.S. domestic trade. The Fuji was not qualified
because it was built in Japan and the U.S. coastwise laws generally exclude
foreign-built vessels from the U.S. domestic trade. The barge was not qualified
because (i) the Oxy Producer/Oxy 4102, although built in the United States, was
built with the assistance of federal subsidy, (ii) the barge was purchased by
the Company with certain tax-deferred funds, and (iii) the provisions of the
Merchant Marine Act, 1936, as amended, authorizing the subsidy and tax-deferral
programs involved exclude vessels that have been the subject of the programs
from operating in the U.S. domestic trade.

An exception to the coastwise laws' exclusion of foreign-built vessels from
the U.S. domestic trade is the Wrecked Vessel Act, which provides that a
foreign-built vessel wrecked on the coast of the United States may become
qualified for the U.S. domestic trade if it is repaired in the United States at
a cost of at least three times its appraised salvaged value. In a series of
rulings between 1985 and 1987, the Coast Guard, which administers the Wrecked
Vessel Act, determined that the Fuji would qualify for domestic operation under
the Act if it were repaired in the United States, by combining it with the barge
portion of the Oxy Producer/Oxy 4102, at a cost of at least $11.5 million. Also
in 1987, the Maritime Administration, which administers the Merchant Marine Act,
determined that once the barge was incorporated into the rebuilt Fuji, the barge
would have lost its character as a vessel and the domestic-trading restrictions
applicable to vessels built with subsidy assistance and purchased with
tax-deferred funds would no longer be operative. In 1990, following the
Company's completion of the repair project, the Coast Guard determined that the
value of the repairs exceeded $20 million and that the repaired vessel was the
rebuilt Fuji, renamed Seabulk America, eligible to operate in the U.S. domestic
trade.

In Keystone Shipping Co. v. United States, pending in the U.S. District
Court for the District of Columbia (Civil Action No. 90-2762), the plaintiffs,
competitors of the Company, in 1990 asked the court to invalidate the foregoing
Coast Guard and Maritime Administration determinations that the Seabulk America
is qualified to operate in the U.S. domestic trade. The Company, as the sole
beneficiary of those determinations, has intervened as a defendant in the suit.
In September 1992, the court upheld certain aspects of the Coast Guard
determinations, concluded that the agencies had provided insufficient
explanation to enable the court to determine the validity of the Maritime
Administration determinations and the remaining aspects of the Coast Guard
determinations, and remanded the matter to each agency for further explanation
of its respective determinations. Those explanations were provided by August
1994, and the plaintiffs have to date not renewed their requests for an order
declaring the agency determinations unlawful. Should plaintiffs renew such
requests and obtain such an order, the Seabulk America would be limited to
operations in the foreign trades, where, although it would be less competitive
than in the U.S. domestic trade, it would be eligible to receive
operating-differential subsidy under a currently inactive subsidy contract held
by the Company. The Company believes that plaintiffs' suit was without merit
and, should it be renewed, intends to continue vigorously to support the
government's defense of the agency determinations.

In Norfolk Shipbuilding and Dry Dock Corporation v. Seabulk Transmarine
Partnership, Ltd., pending in the U.S. District Court for the Eastern District
of Louisiana (Civil Action No. 93-1312), one of the shipyards that contracted to
complete the Seabulk America for the Company is seeking to

50
<PAGE>
recover from the Company approximately $6.1 million for alleged additions and
changes to the contract work and costs of alleged delay and disruption, in
addition to $2.4 million of the $5.9 million contract price that the Company has
withheld. In addition, the shipyard is seeking $10.0 million of punitive
damages. The Company has asserted counterclaims aggregating $5.6 million for
contract deletions, unfinished and defective work, and liquidated damages for
late delivery. In 1993, when this suit was filed, the Company was required to
obtain a $5.6 million letter of credit in order to furnish a bond to obtain the
release of the Seabulk America, which had been arrested pursuant to customary
procedures in litigation involving vessels. The suit, which involves numerous
complex factual issues, is currently in the pre-trial discovery stage. While the
Company believes that the plaintiff's claims are without merit and that its
counterclaims are meritorious, there can be no assurance that the ultimate
resolution of the suit will not require some payment by the Company in addition
to the $3.6 million previously paid.

The Company is also a defendant in a suit relating to certain of its
offshore supply boats pending in the Circuit Court of the 17th Judicial Circuit
of Florida, U.S. Offshore, Inc. v. Seabulk Offshore, Ltd. (No. 93-32963(09)).
The suit involves a claim by a former limited partner in the partnership that
owns eight of the supply boats seeking an unspecified amount of damages for
alleged breach of a contract by which the Company agreed to pay the plaintiff 5%
of the revenues (not to exceed $1.3 million) earned from the operation of the
boats during the 40 months ended March 31, 1994. The Company has paid the
plaintiff approximately $700,000 pursuant to the contract and believes that the
claim for any additional amount is without merit.

Affiliates of the Company have intervened in two parallel legal actions
brought by Kirby Corporation ("Kirby"), an operator of vessels with which the
five new product carriers in which the Company has an interest will compete,
seeking to have the construction project stopped. Kirby's actions allege that
the U.S. Maritime Administration acted unlawfully in guaranteeing, pursuant to
Title XI of the Merchant Marine Act, 1936, as amended ("Title XI"), the $215
million of ship financing bonds issued to finance the project, specifically
asserting that the Maritime Administration erroneously determined that the
project is economically sound and that the entities that will own the vessels
are U.S. citizens qualified to operate the vessels in the coastwise trade. The
Company believes the actions are without merit, has supported the U.S.
Department of Justice in obtaining dismissal of one of the actions, is
continuing to support the Department in defending against Kirby's appeal from
that dismissal and in seeking dismissal of the remaining action. Both actions
are currently pending in the United States Court of Appeals for the Fifth
Circuit, as Kirby Corporation vs. United States (No. 96-60154) and Kirby
Corporation vs. Pena (No. 96-20582).

By letter dated June 26, 1996, Occidental Chemical Corporation, a shipper of
liquid caustic soda, advised the FTC and the DOJ that it opposes the Company's
acquisition of the OMI Chemical Carriers and urged their inquiry into the
acquisition. As a result, the FTC, which on November 14, 1995 granted early
termination of the waiting period under the HSR Act with respect to the proposed
acquisition, has requested the voluntary submission by the Company of certain
information related to the acquisition. The Company believes that neither the
FTC nor the DOJ will initiate any formal action with respect to the acquisition
that would be adverse to the Company; provided, however, as with any such
acquisition, there can be no assurance that the FTC or the DOJ will not file
suit pursuant to the federal antitrust laws to enjoin the consummation of the
acquisition or to seek divestiture of one or more of the OMI Chemical Carriers
by the Company following the consummation of the acquisition. The Company cannot
predict the ultimate outcome of any such action if it were to be initiated.

From time to time the Company is also party to litigation arising in the
ordinary course of its business, most of which is covered by insurance.

PROPERTIES

The Company's principal offices are located in Fort Lauderdale, Florida,
where the Company leases approximately 36,000 square feet of office and shop
space under a lease that expires in 2009. In

51
<PAGE>
addition, the Company leases facilities in Houston, Texas, Lafayette, Louisiana,
and Green Cove Springs, Florida, to support its operations.

EMPLOYEES

As of June 15, 1996, the Company had approximately 820 employees. Management
considers relations with employees to be satisfactory. The Company is not a
party to any collective bargaining agreement with a national labor union with
respect to any of its current fleet. The officers and crew of the Seabulk
America, Seabulk Challenger, and Seabulk Magnachem are, however, subject to
collective bargaining arrangements. Unlike the Company's existing fleet, the OMI
Chemical Carriers are manned by members of national maritime labor unions
pursuant to collective bargaining agreements. The Company's crewing agent has
reached agreement with the unions on a new collective bargaining agreement on
terms comparable to the terms of the existing agreement.

52
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are:

<TABLE><CAPTION>
NAME AGE CURRENT POSITIONS
<S> <C> <C>

J. Erik Hvide(1).................. 47 Chairman of the Board, President, Chief Executive
Officer, and Director

John H. Blankley(1)............... 48 Executive Vice President, Chief Financial Officer,
Treasurer, and Director

Donald L. Caldera................. 61 Executive Vice President--Development and Director

Eugene F. Sweeney(1).............. 53 Executive Vice President--Operations and Director

Arthur E. Bailey.................. 48 Vice President--Human Resources and Strategic
Quality Planning

Andrew W. Brauninger.............. 50 Vice President--Offshore Division and President--
Seabulk Offshore, Ltd.

Gene Douglas...................... 48 Vice President--Legal & General Counsel and
Secretary

William R. Ludt................... 48 Vice President--Inland Services Division and
President--Sun State Marine Services, Inc.

Robert A. Santos.................. 64 Vice President--Offshore and Harbor Towing
Operations

Robert B. Calhoun, Jr.(3)......... 53 Director

Gerald Farmer(2)(3)............... 50 Director

Jean Fitzgerald(1)(2)............. 70 Director

John Lee(2)....................... 59 Director

Walter C. Mink(3)................. 70 Director

Robert Rice(3).................... 73 Director

Raymond B. Vickers(2)............. 46 Director
</TABLE>

- -----------------------
(1) Member of the Executive Committee.

(2) Member of the Compensation Committee.

(3) Member of the Audit and Financial Committee.

MR. HVIDE has been the Company's Chairman since September 1994 and its
President and Chief Executive Officer since January 1991. He has been a director
of the Company since 1973. From 1981 until 1991, Mr. Hvide was President and
Chief Operating Officer of the Company. From January 1991 to September 1994, he
was also Vice Chairman. He has been employed by the Company in various
capacities since 1970 and became Vice President in 1973. He is also a director
of the American Waterways Operators, a participant on the Transportation
Committee of the American Petroleum Institute, a member of the American Bureau
of Shipping, a past Chairman of the Board of the American Institute of Merchant
Shipping and a past appointee to the U.S. Coast Guard's Towing Safety Advisory
Committee. Mr. Hvide is the son of Hans J. Hvide, the founder of the Company.

MR. BLANKLEY has been a director of the Company since September 1991 and has
been Executive Vice President--Chief Financial Officer and Treasurer since
September 1995. He previously served as a director and Chief Financial Officer
of Harris Chemical Group Inc., a chemical manufacturing company, from April 1993
to August 1994. Mr. Blankley is the owner of Seafirst Capital, a ship finance
consulting business he founded in 1994. He served as Executive Vice
President--Finance and Chief Financial Officer of Stolt-Nielsen, Inc., a
publicly traded international operator of specialty chemical

53
<PAGE>
tankers, from 1985 to 1991; and from 1983 until 1985, Mr. Blankley was a
director, Senior Vice President, and Chief Financial Officer of BP North America
Inc. Mr. Blankley is also a director of MC Shipping, a publicly traded operator
of container feeder vessels.

MR. CALDERA has been Executive Vice President--Development of the Company
since September 1994. Mr. Caldera became a director of the Company in April
1994. From November 1990 to January 1992, he was Chief Executive Officer of
Global Sovcruise Lines, a joint Swiss-Soviet shipping venture. Between 1985 and
June 1990 he was Chairman and Chief Executive of Norex-America, Inc. (formerly
Bermuda Star Lines, Inc.), a publicly traded cruise ship line. Between 1980 and
1985 Mr. Caldera served as Senior Vice President--Marketing and Sales of Midland
Enterprises, Inc., a diversified inland waterways company. From 1976 to 1980 he
was Executive Vice President and Chief Operating Officer of Interocean
Management Corporation, a firm managing foreign-flag and U.S.-flag tankers.

MR. SWEENEY has been Executive Vice President--Operations of the Company
since September 1994 and a director since 1984. He was Senior Vice
President--Operations of the Company from 1991 to September 1994. He joined the
Company in 1981 as Vice President--Ship Management. Prior to joining the
Company, Mr. Sweeney was employed for 17 years by Texaco, Inc., where he served
in sea-going and shore management positions, including operations manager of
Texaco's U.S. tanker fleet. Mr. Sweeney is past President of the Chemical
Carriers Association, a member of the Society of Naval Architects and Marine
Engineers and served as a member of a National Academy of Sciences Committee to
study marine navigation and pilotage.

MR. BAILEY has been Vice President--Human Resources and Strategic Quality
Planning since December 1994. From November 1993 to December 1994, he was
President of Advantage Training Associates, a consulting company he founded.
From September 1983 to November 1993, he was employed by Florida Power & Light
Company.

MR. BRAUNINGER has been Vice President--Offshore Division since March 1990
and the President of Seabulk Offshore, Ltd., the Company's offshore energy
support services subsidiary, since September 1994. He was Vice President of
Offshore Operations from May 1990 to September 1994 and Vice
President--Development from April 1989 to May 1990. From 1987 to 1989, Mr.
Brauninger was President of OMI Offshore Services, Inc., an operator of offshore
service vessels. Previously, he was employed by Sabine Towing and Transportation
Company, where he held a variety of posts including Vice President--Harbor
Division.

MR. DOUGLAS has been Vice President--Legal, General Counsel and Secretary of
the Company since 1975. He was an attorney with the Fort Lauderdale, Florida law
firm of Spear and Deuschle, P.A. prior to joining the Company. He has been
admitted to the Florida Bar since 1972 and is admitted to practice before
various federal courts. He is also a member of the American Bar Association, the
Maritime Law Association of the United States and other professional
organizations.

MR. LUDT has been Vice President--Inland Services Division since January
1995 and the President of Sun State Marine Services, Inc., the Company's energy
tug and barge subsidiary, since September 1994. He was director--Fleet
Operations of the Company from July 1982 to September 1994. Since joining the
Company in 1979, he has also served as Fleet Manager and Port Engineer. He
served as the President of the Chemical Carriers Association from 1989 to 1990
and as Vice President of that association from 1990 to 1992. Mr. Ludt has also
served on various working groups within the U.S. Coast Guard's Chemical
Transportation Advisory Committee concerning issues such as vapor control and
marine occupational safety and health. Mr. Ludt holds a dual license as a Third
Mate and Third Assistant Engineer, Steam and Motor Vessels.

MR. SANTOS has been Vice President--Towing Operations of the Company since
1983. Mr. Santos joined the Company as its towing operations manager in 1962. He
has served as a Commissioner of Florida's Board of Pilot Commissioners, Chairman
of the Escort Vessel Subcommittee of the American Waterways Operators and as a
member of various marine-related trade associations and boards.

54
<PAGE>
MR. CALHOUN has been a director of the Company since September 1994. Mr.
Calhoun has been President of Clipper Asset Management Corporation, the sole
general partner of The Clipper Group, L.P., a private investment firm, since
1991. From 1975 to 1991, Mr. Calhoun was a Managing Director of CS First Boston
Corporation, an investment banking firm. Mr. Calhoun serves as a director of
Highway Master Communications, the operator of a wireless services network, and
Interstate Bakeries Corporation, a national distributor of baked goods. He also
serves as a director of several privately held companies.

MR. FARMER has served as a director of the Company since 1975. He was
Executive Vice President--Chief Financial Officer and Treasurer of the Company
from September 1994 until September 1, 1995. In May 1995 Mr. Farmer, for reasons
unrelated to the Company or his responsibilities, retired effective as of
September 1, 1995 as Chief Financial Officer and Treasurer. He continued as an
Executive Vice President of the Company through December 15, 1995. He was Senior
Vice President-- Finance and Administration from January 1991 to September 1994,
having joined the Company in 1973 as Vice President--Finance.

MR. FITZGERALD has been a director of the Company since March 1994. Since
1992, he has served as the Chairman of Florida Alliance, Inc., a consortium of
maritime interests. From 1990 to 1992, he was Executive Vice President of NDE
Testing & Equipment, Inc., a nationwide storage-tank testing company. From 1988
to 1990, he was with Frederic R. Harris, Inc., an international consulting
engineering firm. Mr. Fitzgerald was a cofounder and the President of American
Tank Testing Service, Inc., a firm that was subsequently acquired by NDE
Environmental Corporation, from 1986 to 1987. In 1982 and 1983, he served as the
Company's Vice President for Governmental Affairs. His other business experience
includes service as President of Tracor Marine, Inc. from 1976 to 1979 and
Director of Engineering of Tracor's Systems Technology Division from 1974 to
1976. Mr. Fitzgerald retired from the U.S. Navy in 1974 in the rank of Captain.
During his naval career he commanded major fleet units at sea and served in the
offices of the Chief of Naval Operations and the Secretary of Defense. He is a
past Commissioner and Chairman of the Port Everglades Authority.

MR. LEE has been a director of the Company since September 1994 and is
Chairman and Chief Executive Officer of Hexcel Corporation, an advanced
materials manufacturer. Mr. Lee joined the Board of Hexcel Corporation in May of
1993 as an outside independent director. In August 1993, Mr. Lee was asked to
become the Chairman and Co-Chief Executive Officer of Hexcel Corporation, which
was experiencing financial difficulties, in order to effect a consensual
reorganization. In December 1993, having concluded that a consensual
reorganization could not be accomplished, Hexcel Corporation filed for
protection under Chapter 11 of the Federal Bankruptcy Code and appointed Mr. Lee
sole Chief Executive Officer to effect a Plan of Reorganization. The
reorganization was completed in February 1995 and Hexcel emerged from Chapter
11. Mr. Lee has been a Director of Aviva Petroleum, Inc. since August 1993, and
has been Chairman, President and Chief Executive Officer of Lee Development
Corporation, a corporation providing investment and merchant banking services,
since 1987. He was a director of XTRA Corporation, a Massachusetts-based
transportation and equipment leasing company, from 1990 through January 1996.
Mr. Lee also served as Chairman and Chief Executive Officer of Seminole
Corporation, a fertilizer manufacturer, from July 1989 through April 1993 and
director of Tosco Corporation, a refiner, from April 1988 through April 1993 and
was President and Chief Operating Officer of Tosco Corporation from April 1990
through April 1993. Mr. Lee is an advisor to The Clipper Group, L.P., a private
investment firm, and is a trustee of Yale University.

MR. MINK has been a director of the Company since October 1990. He is
President of Walter C. Mink & Associates, a maritime advisory and consulting
firm in Las Vegas, Nevada. From 1978 to 1986, Mr. Mink was President of Mobil
Shipping and Transportation Company. Previously, he was President of Seabrokers,
Inc., a marine brokerage firm, and was earlier employed by Lago Oil, Esso
Tankers, and Mobil Oil Transport. Mr. Mink is a director of First Olsen Tankers,
Ltd. He served on the Board of Managers of the American Bureau of Shipping and
is a member of the Society of Naval Architects and Marine Engineers.

55
<PAGE>
MR. RICE has been a director of the Company since January 1992. A financial
consultant, he was Senior Vice President of Citibank, N.A. from 1954 to his
retirement in 1983. Mr. Rice is a director of ATCO Ltd., First Olsen Tankers
Ltd., Pride Refining Inc., and Atcor Resources Ltd.

DR. VICKERS has been a director of the Company since March 1994. An attorney
in private practice in Florida, he has represented more than a hundred financial
institutions. He is the author of Panic in Paradise: Florida's Banking Crash of
1926 and an adjunct professor of U.S. economic and business history at Florida
State University. From 1975 to 1979, he served as Assistant Comptroller of the
State of Florida.

Upon consummation of the Offering, the Company's Board of Directors will be
divided into three classes, one class of which is elected each year to hold
office for a three-year term and until successors are elected and qualified. The
three classes of the Board of Directors are as follows: Class I, comprised of
Messrs. Caldera, Vickers, and Rice, who will serve for a term expiring in 1997;
Class II, comprised of Messrs. Sweeney, Mink, Blankley, and Lee, who will serve
for a term expiring in 1998; and Class III, comprised of Messrs. Hvide,
Fitzgerald, Farmer, and Calhoun, who will serve for a term expiring in 1999.
Under the terms of the Shareholders Agreement, the Investor Group will nominate
three persons to the Company's 11-member Board of Directors and Mr. Hvide will
nominate eight persons to the Board. See "Description of Capital
Stock--Shareholders Agreement" and "--Common Stock." Messrs. Calhoun, Lee, and
Rice are currently the Investor Group's nominees.

BOARD COMMITTEES

The Company's Board of Directors has three committees: (i) the Executive
Committee; (ii) the Compensation Committee; and (iii) the Audit and Financial
Committee.

The Executive Committee exercises the powers of the Board of Directors in
the management of the business and affairs of the Company between Board meetings
to the extent permitted by Florida law and as limited by the Company's bylaws.
Its current members are Messrs. Hvide (Chairman), Blankley, Fitzgerald, and
Sweeney.

The Compensation Committee reviews and recommends to the Board of Directors
the compensation and benefits of all executive officers of the Company and
reviews general policy matters relating to compensation and benefits of
employees of the Company. The Compensation Committee also administers the
Company's bonus and stock option plans. Its current members are Messrs.
Fitzgerald (Chairman), Vickers, Lee, and Farmer.

The Audit and Financial Committee is authorized by the Board to review, with
the Company's independent public accountants, the annual financial statements of
the Company prior to publication; to review the work of, and approve audit
services performed by, such independent accountants; to make annual
recommendations to the Board for the appointment of independent public
accountants for the ensuing year; and to administer the Company's policy with
respect to transactions with affiliated persons. See "Certain Transactions." Its
current members are Messrs. Farmer (Chairman), Calhoun, Mink, and Rice.

EXECUTIVE COMPENSATION

The following table sets forth the compensation for the Chief Executive
Officer and each of the five most highly compensated executive officers whose
individual remuneration exceeded $100,000 for the year ended December 31, 1995
(the "Named Executives").

56
<PAGE>
SUMMARY COMPENSATION TABLE

<TABLE><CAPTION>
ANNUAL COMPENSATION
---------------------------------------------------
OTHER ALL
NAME AND ANNUAL OTHER
PRINCIPAL POSITION SALARY BONUS COMPENSATION(1) COMPENSATION(2)
<S> <C> <C> <C> <C>
J. Erik Hvide.............................. $462,000 $100,000 $ 4,286 $56,238
Chief Executive Officer
Gerald Farmer(3)........................... 153,939 15,000 3,399 18,782
Former Executive Vice President
Eugene F. Sweeney.......................... 150,000 50,000 2,676 16,470
Executive Vice President--Operations
Donald L. Caldera.......................... 152,625 35,000 709 15,572
Executive Vice President--Development
Gene Douglas............................... 115,000 20,000 -- 9,871
Vice President--Legal and General Counsel
Andrew W. Brauninger....................... 110,000 20,000 659 10,674
Vice President--Offshore Division
</TABLE>

- -----------------------

(1) Includes personal use of Company automobiles in the amounts of $4,286,
$3,399, $2,676, $709, and $659 for Messrs. Hvide, Farmer, Sweeney, Caldera,
and Brauninger, respectively.

(2) Consists of Company 401(k) contributions of $10,500 for each of Messrs.
Hvide, Farmer, Sweeney, Caldera, and Brauninger, and $8,890 for Mr. Douglas,
and Company life insurance premium payments of $1,091, $576, $540, $1,404,
$66, and $174 for Messrs. Hvide, Farmer, Sweeney, Caldera, Douglas, and
Brauninger, respectively, and club and professional membership payments of
$13,357, $430, $180, $1,568, and $915 for Messrs. Hvide, Farmer, Sweeney,
Caldera, and Douglas, respectively, and additional benefits of $31,290,
$7,276, $5,250, and $2,100, for Messrs. Hvide, Farmer, Sweeney, and Caldera,
respectively.

(3) Chief Financial Officer until September 1, 1995 and Executive Vice President
until December 15, 1995.

The following table contains information concerning stock options to be
granted to each of the Named Executives (other than Mr. Farmer) and Mr. Blankley
prior to the consummation of the Offering. All options will be granted pursuant
to the Hvide Marine Incorporated Equity Ownership Plan.

<TABLE><CAPTION>
OPTIONS TO BE GRANTED PRIOR TO OFFERING
INDIVIDUAL GRANTS
----------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES
TOTAL SHARES OF STOCK
SHARES UNDERLYING APPRECIATION FOR
UNDERLYING OPTIONS PER SHARE OPTION TERM(2)
OPTIONS TO BE TO BE GRANTED EXERCISE EXPIRATION ---------------------
NAME GRANTED(1) TO EMPLOYEES PRICE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
J. Erik Hvide............. 100,000 12.0% 12.00 --(3) $331,538 $ 732,612
John H. Blankley.......... 100,000 12.0 12.00 --(4) 754,624 1,912,491
Eugene F. Sweeney......... 100,000 12.0 12.00 --(4) 754,624 1,912,491
Donald L. Caldera......... 100,000 12.0 12.00 --(4) 754,624 1,912,491
Gene Douglas.............. 28,000 3.4 12.00 --(4) 211,309 535,497
Andrew W. Brauninger...... -- -- -- -- -- --
</TABLE>

- -----------------------

(1) Options vest 25% per annum over four years.

(2) The dollar amounts are the result of calculations at specified rates of
appreciation, and therefore are not intended to forecast possible future
appreciation.

(3) Five years following the grant date.

(4) Ten years following the grant date.

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<PAGE>
EQUITY OWNERSHIP PLANS

Long-Term Incentive Plan. The Company has reserved 1,000,000 shares of Class
A Common Stock for issuance under the Hvide Marine Incorporated Equity Ownership
Plan (the "Plan"). The Plan is administered by the Compensation Committee.
Subject to selection by the Compensation Committee, any key employee, including
executive officers, is eligible to participate in the Plan. The benefits to be
granted under the Plan may take the form of (i) incentive or non-qualified stock
options, (ii) stock awards subject to future vesting, (iii) stock appreciation
rights, (iv) phantom shares, or (v) performance unit awards. Options granted
under the Plan may not be exercised until vested and shares of Common Stock may
not be issued pursuant to any stock award until vested. The Compensation
Committee is empowered under the Plan to determine all terms and provisions
under which options, awards, and other rights are granted under the Plan,
including (i) the number of shares subject to each option, award, or right, (ii)
when the option, award, or right becomes exercisable, (iii) the exercise price,
and (iv) the duration of the option, award, or right, which cannot exceed ten
years. The Compensation Committee has determined to grant prior to the
consummation of the Offering options to 53 employees (including four employees
of OSTC who will become employees of the Company) to purchase 800,000 shares
(including options to purchase 428,000 shares granted to the Named Executives)
at an exercise price equal to the initial public offering price of the Class A
Common Stock. Such options will have ten year terms and will vest 25% each year
over four years.

Employee Stock-Purchase Plan. The Company has reserved 500,000 shares of
Class A Common Stock for purchase over the next five years under its 1996
Employee Stock-Purchase Plan. This plan permits employees to purchase stock at a
discount to market value and be eligible to receive favorable income tax
treatment of the discount under Section 423 of the Internal Revenue Code. Under
this plan, all employees working more than twenty hours weekly are eligible to
purchase reserved shares at a discount equal to 15% of market price. The market
cost of shares purchased by an employee under this plan may not exceed $25,000
per year.

DIRECTOR COMPENSATION AND OPTIONS

Directors not employed by the Company are paid $2,000 per board meeting and
$1,500 per board committee meeting attended and are reimbursed by the Company
for reasonable out-of-pocket expenses incurred for attendance at such meetings
in accordance with Company policy. All committee chairmen not employed by the
Company are also paid an annual retainer of $3,000. In order to promote the
alignment of the directors' and the stockholders' financial interests, it is the
intent of the Board of Directors that each Director should initially acquire at
least 500 shares of Common Stock and should increase this ownership interest by
a minimum of 500 shares annually. Each director's ownership interest can be
achieved by the purchase of Common Stock on the open market, by stock grants, or
by the exercise of stock options. In this regard, the Company intends to grant
to each director who is not an employee 500 shares of Class A Common Stock per
year. Additionally, the Company intends to adopt a stock option plan for
directors (the "Directors Plan") and to reserve 70,000 shares of Class A Common
Stock for issuance under that plan. Under the Directors Plan, all directors not
employed by the Company will annually be granted an option to purchase 1,500
shares of Class A Common Stock with an exercise price equal to the fair market
value of the Class A Common Stock on the date of grant. The date of grant for
these options will be the first business day following the annual meeting of
shareholders. Also, the Company intends to grant to each director not employed
by the Company prior to the consummation of the Offering and pursuant to the
Directors Plan, an option to purchase 5,000 shares with an exercise price equal
to the offering price of the Class A Common Stock. Directors elected to the
Board after consummation of the Offering will each be granted an option to
purchase 5,000 shares with an exercise price equal to the fair market value of
the Class A Common Stock as of the first business day following the stockholder
meeting at which the director is elected to the Board. All stock options under
the Directors Plan will vest at the earliest of death, disability,
change-in-control, voluntary retirement from the Board at or after age 62,
completion of ten years service on the Board, or one year from the

58
<PAGE>
date of grant. All directors have agreed not to sell any shares of Class A
Common Stock for 180 days after the date of the Prospectus without the written
consent of the Representatives.

ANNUAL INCENTIVE PLAN

The Company has established an annual incentive plan under which key members
of management will be awarded cash payments based upon the achievement of
certain performance goals. Each year, the chief executive officer will recommend
to the Compensation Committee a list of participants and performance goals for
each proposed participant. The performance goals will consist of an objective
element, which will be based upon financial objectives relating to the Company
as a whole and/or a component of the Company, and a discretionary element, which
will be established by a participant's supervisor and may be financial or
non-financial in nature. Participants will be awarded cash payments based upon
the extent to which they have met or exceeded their performance goals.

NON-COMPETE AND BENEFITS AGREEMENTS

The Company is party to a non-compete agreement dated September 28, 1994
with Hans J. Hvide, the founder of the Company and father of its current
Chairman, pursuant to which Mr. Hvide receives a fee of $185,000 per year
(subject to annual adjustments based on the Consumer Price Index) in exchange
for an agreement not to provide any services to any person in competition with
the Company. The non-compete agreement expires upon the earlier of September 30,
2014 or the death of Mr. Hvide. The non-compete agreement can be terminated by
the Company only if Mr. Hvide materially breaches the Agreement, and by Mr.
Hvide only if the Company fails to pay the non-compete fees. The Company is also
party to a post-retirement benefits agreement with Mr. Hvide pursuant to which
he receives the use of an automobile, major medical health insurance for himself
and for his spouse, the use of an office and secretarial assistance, and a
payment of $2,000 per month in lieu of other expenses. The term of the
post-retirement benefits agreement is for the life of Mr. Hvide except for major
medical health insurance for Mr. Hvide's spouse, which is for the life of Mr.
Hvide's spouse. In the event the Company terminates the non-compete agreement,
the post-retirement benefits agreement terminates automatically.

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<PAGE>
CERTAIN TRANSACTIONS

The Company's Articles of Incorporation require that any material
transaction between the Company and any of its officers, directors, holders of
more than 5% of any class of its capital stock, or other affiliates be on terms
no less favorable than those that could be obtained from unaffiliated persons
and be approved by a majority of the independent and disinterested directors.
The Company believes that the transactions described below were or will be on
terms no less favorable than those that could be obtained from unaffiliated
persons. Furnished below is information regarding certain transactions since
January 1, 1993 in which executive officers and directors of the Company have
had an interest.

In September 1994, the Company purchased all of the partnership interests
owned by certain directors, officers, and employees of the Company in Hvide
Offshore Services, Ltd. ("HOS") for $607,000 in cash and $1.0 million in
promissory notes (the "HOS Notes") and assumed the bareboat charter rights and
obligations of HOS, which charters were acquired by HOS at no cost. HOS was the
bareboat charterer of four offshore service vessels managed by the Company. See
"Description of Certain Indebtedness--Long-Term Charter Obligations--Bareboat
Charters" and "--Acquisition Notes and Assumed Indebtedness." The purchase price
of these interests was based upon an independent appraisal of the fair market
value of the vessels being acquired. The appraisal, which was based upon a
market analysis, was conducted by Bassoe Offshore (USA), Inc., a company with
substantial experience in the maritime industry. The general partner of HOS was
Maritime Transport Development Corp. ("Maritime Transport"), a company wholly
owned by Hans J. Hvide and for which J. Erik Hvide serves as an officer and a
director. The limited partners of HOS were Messrs. Hans J. Hvide (32%), J. Erik
Hvide (32%), Farmer (10%), Sweeney (7.5%), Brauninger (10%), John Krumenacker
(the Company's Controller) (5%), and Douglas (2.5%). HOS has since been
dissolved and the Company has assumed all of its obligations. As a result of the
cancellation of $0.1 million in principal amount of the HOS Notes held by
Messrs. J. Erik and Hans J. Hvide as described below, there is currently
outstanding $0.9 million principal amount of HOS Notes. Of the currently
outstanding principal and accrued interest thereon, $0.3 million will be repaid
in cash with a portion of the proceeds from the Offering, $0.2 million will be
exchanged for shares of Class A Common Stock valued at the initial public
offering price, and the balance will remain outstanding.

Also in September 1994, the Company purchased for $781,000 in cash and an
aggregate of $1,089,000 in promissory notes (the "HCL Notes") partnership
interests owned by certain directors, officers, and employees of the Company in
(i) Hvide Chartering, Ltd. ("HCL"), which owns the tug Hollywood (formerly the
Cape Canaveral) and chartered it to the Company; (ii) Hvide Leasing Partnership,
Ltd. ("HLP"), which owned office and computer equipment leased to the Company
(acquired by HLP in 1988 for $87,000); and (iii) HLP II, Ltd. ("HLP II"), which
owned office furniture and equipment leased to the Company (acquired by HLP II
in 1990 for $372,000). HLP and HLP II have since been dissolved. See
"Description of Certain Indebtedness--Acquisition Notes and Assumed
Indebtedness" for a description of the HCL Notes. The purchase price of the HCL
interests was based upon an independent appraisal of the fair market value of
the Hollywood. The HCL appraisal, which was based upon a market analysis, was
conducted by Charles S. Smith, a marine consultant with substantial experience
in the maritime industry. The HLP and HLP II partnership interests were
purchased at book value, which the Company believes approximated fair market
value, for $20,000 and $93,000, respectively, in cash. The Company believes that
the book value approximated fair market value because the interests were not
liquid and had declining values which the Company believes correspond with their
depreciated book value. Messrs. Hans J. Hvide (33.33%), J. Erik Hvide (20.0%),
Farmer (2.67%), Sweeney (2.67%), Santos (2.67%), and Douglas (2.67%) were
limited partners of HCL. The Company was the sole general partner of HCL and the
owner of a 33.33% interest in that partnership. Messrs. J. Erik Hvide (30%),
Farmer (10%), Sweeney (5%), Santos (10%), and Douglas (5%) were the limited
partners of HLP. The Company was the sole general partner of HLP and the owner
of a 40.0% interest in that partnership. The Company, Mr. J. Erik Hvide
(14.29%), and Mr. Farmer (14.29%) were the limited partners of HLP II. As a
result of the cancellation of $0.8

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<PAGE>
million in principal amount of the HCL Notes held by Messrs. J. Erik and Hans J.
Hvide as described below, there is currently outstanding $0.3 million principal
amount of HCL Notes. Of the currently outstanding principal and accrued interest
thereon, $0.1 million will be exchanged for shares of Class A Common Stock
valued at the initial public offering price, and the balance will remain
outstanding. The Company was the sole general partner of HLP II, the owner of a
5% interest as general partner in that partnership, and the owner of a 66.42%
interest as a limited partner in that partnership.

In September 1994, the Company issued to the Investor Group $25.0 million
aggregate principal amount of Senior Notes and $25.0 million aggregate principal
amount of Junior Notes at discounts resulting in proceeds to the Company of
approximately $23.1 million and $17.5 million, respectively. In connection with
the issuance of the Junior Notes, the Company issued to members of the Investor
Group 452,518 shares of Class B Common Stock and 313,215 shares of Class C
Common Stock, and agreed to issue to them up to 554,495 additional shares of
Common Stock (to be contributed by J. Erik Hvide) to the extent necessary to
earn a specified return on their investment. In addition, J. Erik Hvide and the
Investor Group are parties to an agreement granting them certain voting and
approval rights, including the right to nominate eight and three persons,
respectively, to the Company's 11-member Board of Directors. The Company intends
to repay $0.6 million of accrued interest on and $13.5 million of principal of
the Senior Notes with a portion of the proceeds of the Offering. The outstanding
principal amount of the Junior Notes repaid with the proceeds of the Offering
will be exchanged for shares of Class A Common Stock and Class B Common Stock
and certain shares of Class B Common Stock and all shares of Class C Common
Stock held by the Investor Group will be converted into shares of Class A Common
Stock or Class B Common Stock. The Company made aggregate cash payments on the
Senior Notes during 1995 in the approximate amount of $3.0 million. In addition,
the Company agreed to pay an annual advisory fee of $100,000 to the Investor
Group. Such fee was paid in full in 1995 and in a pro rata amount of $25,000 for
1994. Following the Offering, the amount of the fee will be reduced by the
compensation received by Messrs. Calhoun and Lee in their capacities as
directors of the Company. See "Management--Director Compensation and Options,"
"Description of Certain Indebtedness--Senior Notes," "--Junior Notes,"
"Description of Capital Stock--Shareholders Agreement," "--Contingent Share
Issuance Agreement," and "Recapitalization Agreement."

In September 1994, the Company redeemed its outstanding preferred stock, all
of which was owned by Hans J. Hvide, at its par value in exchange for $2.4
million in cash and a $3.6 million promissory note (the "Founder's Note"). The
Company will repay $1.6 million of outstanding principal and accrued interest on
the Founder's Note with a portion of the proceeds from the Offering. See
"Description of Certain Indebtedness--Acquisition Notes and Assumed
Indebtedness" and Note 3 to the Company's consolidated financial statements.

Maritime Transport is the successor in interest to the entity which
developed and engineered and provides marketing services for the CATUG(R) vessel
design. Maritime Transport receives a commission equal to 1.25% of charter hire
received by the Company for the Seabulk Challenger and the Seabulk Magnachem as
payment for those development and engineering services. For the years ended
December 31, 1993, 1994, and 1995, the Company made payments to Maritime
Transport of $0.21 million, $0.19 million, and $0.21 million, respectively.

As of December 31, 1995, J. Erik Hvide was indebted to Maritime Transport in
the amount of $675,000 as a result of miscellaneous personal advances made to
him over a number of years. In 1996, Mr. Hvide guaranteed repayment of a like
portion of approximately $0.9 million owed to the Company by Maritime Transport.
All amounts owed to the Company by Maritime Transport, including the amount
guaranteed by Mr. Hvide, will be repaid upon the consummation of the Offering by
the cancellation of $0.8 million of the HCL Notes and $0.1 million of the HOS
Notes held by Mr. Hvide and Hans J. Hvide.

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<PAGE>
The Company has agreed to purchase a 152-foot crew/supply boat, to be named
Seabulk St. Francis, from J. Erik Hvide and the Investor Group for a purchase
price of approximately $2.2 million, which is equal to their cost of the vessel.
The Seabulk St. Francis is currently under construction and is expected to be
available for delivery in October 1996.

The Company has verbal arrangements with Jean Fitzgerald and Gerald Farmer
to provide technical and financial consulting services, respectively, to the
Company. Mr. Fitzgerald, whose arrangement commenced in February 1994, is
currently compensated for such services at the rate of $6,500 per month, and
received total compensation of $66,000 during 1995. Mr. Farmer, whose
arrangement commenced in December 1995, is compensated at an hourly rate. Both
arrangements may be terminated by either party without prior notice.

In addition to the foregoing transactions involving officers and directors,
the Company engaged First Stanford Corporation to render advisory services to
the Company. In exchange for these services, the Company agreed to pay a fee
equal to approximately $1.6 million, of which 30% is payable in cash and 70% is
payable in Class A Common Stock of the Company valued at the initial public
offering price, net of underwriting discounts and commissions (100,358 shares).
The Company has also agreed to indemnify and hold First Stanford harmless from
and against any liabilities arising from its engagement except those arising
from First Stanford's bad faith or gross negligence. Neither First Stanford nor
its principal, Thomas M. Ferguson, is affiliated with or related to the Company.
Mr. Ferguson has agreed to indemnify the Company against liability incurred by
it pursuant to certain indemnity obligations that the Company is undertaking in
connection with the Seal Fleet acquisition. See "Business--The Acquisitions."
The Class A Common Stock payable to First Stanford will be held by the Company
as security for Mr. Ferguson's indemnity obligation, subject to release
beginning 24 months following the Offering.

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<PAGE>

SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of Common Stock immediately prior to the Offering and as adjusted to
give effect to the sale of 7,000,000 shares of Class A Common Stock in the
Offering, by (i) each Named Executive, (ii) each director of the Company, (iii)
each of the Company's stockholders who is known by the Company to beneficially
own at least five percent of any class of Common Stock of the Company or at
least five percent of the voting power of the Company's Common Stock, and (iv)
all executive officers and directors of the Company as a group. Management
believes that the beneficial owners of the Common Stock listed below, based on
information furnished by such owners, have sole voting and investment power with
respect to such shares, subject to community property laws where applicable, the
provisions of the Shareholders Agreement, and the information contained in the
footnotes to the table below.
<TABLE><CAPTION>
PERCENT
OF
TOTAL
CLASS A COMMON STOCK CLASS B COMMON STOCK VOTING
------------------------------------- ------------------------------------- POWER OF
PERCENT OF CLASS PERCENT OF CLASS OUTSTANDING
BENEFICIALLY BENEFICIALLY COMMON
OWNED OWNED STOCK
NUMBER ---------------------- NUMBER ---------------------- --------
NAME AND ADDRESS BENEFICIALLY BEFORE AFTER BENEFICIALLY BEFORE AFTER BEFORE
OF BENEFICIAL OWNER(1) OWNED(2) OFFERING(3) OFFERING OWNED(2) OFFERING(3) OFFERING OFFERING
<S> <C> <C> <C> <C> <C> <C> <C>
J. Erik Hvide (4)................ 2,000 * * 1,769,107 79.3% 51.7% 78.2%
Hvide Family Trust I (5)......... -- * * 1,454,383 65.2 42.5 64.3
Hvide Family Trust II (5)........ -- * * 110,215 4.9 3.2 4.9
Clipper/Park HMI, L.P. (6)....... -- * * 750,297 10.4 21.9 10.0
Clipper/Hercules, L.P. (6)....... -- * * 414,871 5.7 12.1 5.7
Clipper/Merban, L.P. (6)......... 219,850 54.1% 2.9% 152,089 * 4.4 *
Clipper/Merchant HMI, L.P. (6)... -- * * 300,119 4.1 8.8 4.1
Clipper Capital Associates, L.P.
(6)(7)........................... 219,850 54.1 2.9 1,650,470 20.7 48.3 21.2
Metropolitan Life Insurance
Company (6)...................... 71,820 23.6 1.0 -- * * *
Olympus Growth Fund II, L.P.
(6).............................. 67,596 22.3 * -- * * *
John H. Blankley................. 1,000 * * -- * * *
Eugene F. Sweeney................ 8,108 * * -- * * *
Gene Douglas..................... 4,580 * * -- * * *
Donald L. Caldera................ -- * * -- * * *
Andrew W. Brauninger............. 7,895 * * -- * * *
Robert B. Calhoun, Jr. (7)....... 219,850 54.1 2.9 1,650,470 20.7 48.3 21.2
Gerald Farmer.................... -- * * -- * * *
Jean Fitzgerald.................. 1,160 * * -- * * *
John Lee......................... -- * * -- * * *
Walter C. Mink................... -- * * -- * * *
Robert Rice...................... -- * * -- * * *
Raymond B. Vickers............... -- * * -- * * *
All executive officers and
directors as a group (16
persons) (7)..................... 244,593 54.1 3.0 3,316,816 100.0 100.0 100.0

NAME AND ADDRESS AFTER
OF BENEFICIAL OWNER(1) OFFERING
<S> <C>
J. Erik Hvide (4)................ 42.4%
Hvide Family Trust I (5)......... 34.9
Hvide Family Trust II (5)........ 2.6
Clipper/Park HMI, L.P. (6)....... 18.0
Clipper/Hercules, L.P. (6)....... 10.0
Clipper/Merban, L.P. (6)......... 4.2
Clipper/Merchant HMI, L.P. (6)... 7.2
Clipper Capital Associates, L.P.
(6)(7)........................... 40.1
Metropolitan Life Insurance
Company (6)...................... *
Olympus Growth Fund II, L.P.
(6).............................. *
John H. Blankley................. *
Eugene F. Sweeney................ *
Gene Douglas..................... *
Donald L. Caldera................ *
Andrew W. Brauninger............. *
Robert B. Calhoun, Jr. (7)....... 40.1
Gerald Farmer.................... *
Jean Fitzgerald.................. *
John Lee......................... *
Walter C. Mink................... *
Robert Rice...................... *
Raymond B. Vickers............... *
All executive officers and
directors as a group (16
persons) (7)..................... 82.5
</TABLE>

- -----------------------

* Less than one percent

(1) Unless otherwise indicated, the address of each of the persons whose name
appears in the table above is: c/o Hvide Marine Incorporated, 2200 Eller
Drive, P.O. Box 13038, Fort Lauderdale, Florida 33316.

(2) Assumes consummation of the following transactions, which will occur
simultaneously with the consummation of the Offering, except as noted: (i)
the issuance of 211,236 shares of Class A Common Stock and 765,394 shares of
Class B Common Stock in exchange for the then-outstanding shares of Class C
Common Stock; (ii) the issuance of 100,358 shares of Class A Common Stock in
payment for services; (iii) the issuance of 25,667 shares of Class A Common
Stock in exchange for certain indebtedness; and (iv) the exchange of 55,500
shares of Class A Common Stock and 1,188,502 shares of Class B Common Stock
following the Offering for the principal amount of the Junior Notes to be
outstanding after the application of the proceeds of the Offering.

(3) Based upon actual holdings prior to consummation of the Offering and the
transactions described in footnote (2).

(4) Includes the shares held by Hvide Family Trust I and Hvide Family Trust II,
of which Mr. Hvide is the sole trustee.

(5) J. Erik Hvide is the sole trustee for both trusts. Hvide Family Trust I is a
trust for the benefit of Mr. Hvide, his sister, Elsa Hvide Sowrey, (now
known as Elsa Hvide Mumma), and their children in which Mr. Hvide has an
economic interest in 65%
(Footnotes continued on following page)

63
<PAGE>
(Footnotes continued from preceding page)

of the income of the trust. Hvide Family Trust II is a trust for the benefit
of Elsa Hvide Sowrey and her children, in which Mr. Hvide has no economic
interest.
(6) Member of the Investor Group, defined as the "Investor Shareholders" in the
Company's Articles of Incorporation. The Investor Group owns an aggregate of
359,266 shares of Class A Common Stock and 1,650,470 shares of Class B
Common Stock (40.5% of total voting power). The address for Clipper Capital
Associates, L.P., Clipper/Hercules HMI, L.P., Clipper/Merban, L.P.,
Clipper/Merchant HMI, L.P., Clipper/Park HMI, L.P. is: c/o Clipper Capital
Associates, L.P., 12 East 49th Street (30th Floor), New York, New York
10017. The address for Metropolitan Life Insurance Company is: 334 Madison
Avenue, P.O. Box 633, Convent Station, New Jersey 07961-0633. The address
for Olympus Growth Fund II, L.P. is: c/o Olympus Partners, Metro Center, One
Station Place, Stamford, Connecticut 06902.
(7) Includes shares held by Clipper/Hercules, L.P., Clipper/Merban, L.P.,
Clipper/Merchant, L.P., and Clipper/Park, L.P. Clipper Capital Associates,
L.P. is the general partner of those entities, and Mr. Calhoun is an
officer, director, and stockholder of the corporate general partner of
Clipper Capital Associates, L.P.

Pursuant to certain agreements, on or about June 10, 1997 (300 days
following completion of the Offering), the Investor Group will receive
additional shares of Class A Common Stock from the Company. J. Erik Hvide and
the Hvide Trusts will contribute a like number of shares to the Company, thereby
changing the amounts of Class A Common Stock and Class B Common Stock owned,
respectively, by the Investor Group and J. Erik Hvide and the Hvide Trusts. For
information concerning the manner in which the number of shares to be
transferred will be determined, see "Description of Capital Stock--Contingent
Share Issuance Agreement."

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<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS

The following is a description of the principal terms of certain of the
Company's indebtedness, including indebtedness to be repaid with a portion of
the proceeds of the Offering and indebtedness to be incurred in connection with
the Acquisitions. Copies of the definitive agreements setting forth the terms of
this indebtedness have been filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following summaries of certain provisions
of the agreements do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
agreements.

BANK DEBT

The Company's outstanding bank indebtedness, aggregating $57.5 million at
March 31, 1996, is held by a five-bank syndicate led by Citibank, N.A. under a
loan agreement (the "Credit Facility"). The Credit Facility, as amended in March
1996, currently provides the Company with a $45.5 million term loan, $15.0
million of revolving lines of credit, and a $5.6 million letter of credit, all
maturing January 15, 2001, with the exception of the letter of credit, which
matures on January 15, 2000. The Credit Facility was amended in June 1996 and,
upon consummation of the Offering, the amount available under the term loan will
increase to $60.5 million, the amount available under the revolving lines of
credit will decrease to $10.0 million, and an additional $25.0 million vessel
acquisition credit line will become available. To the extent that the gross
proceeds of the Offering, including proceeds from the exercise of the
Underwriters' over-allotment option, if any, are less than $91.0 million, the
$25.0 million available under the vessel acquisition credit line will be reduced
by the amount of such shortfall. The gross proceeds from the sale of the
7,000,000 shares offered hereby are $84.0 million. Accordingly, if the
Underwriters' over-allotment option is not exercised, the vessel acquisition
credit line will be reduced to $18.0 million. Advances under the vessel
acquisition credit line will not be permitted to exceed either (i) 70% of the
lesser of the purchase price or appraised value of the vessel being acquired, or
(ii) a multiple of six times EBITDA of the acquisition, and the amount of
available credit will decrease to $11.5 million over a four-year period, during
which time the Company will be required to make quarterly installment payments
equal to the reduction in the available commitment.

Borrowings under the Credit Facility bear interest at prime or LIBOR, at the
Company's option, plus a margin based upon certain financial ratios. Such
borrowings were accruing interest at approximately 8.3% at March 31, 1996. After
the Offering and the consummation of the Acquisitions, annual principal payments
under the term loan will aggregate $2.0 million for the remainder of 1996, $7.0
million in 1997, $9.0 million in 1998, $11.0 million in 1999, $13.0 million in
2000, with the remaining $18.5 million due January 15, 2001. All borrowings are
secured by preferred ship mortgages on all vessels owned by the Company,
assignments of all of the Company's receivables and earnings, and collateral
mortgages of spare parts, supplies, and fuel.

The letter of credit serves as collateral for a surety bond to ensure
payment of any final judgment in the pending litigation relating to the
reconstruction of the Seabulk America. See "Business--Legal Proceedings" and
Note 5 to Notes to Consolidated Financial Statements.

The Credit Facility also provides that amounts equal to 50% of Annual Excess
Cash Flow (as defined) and 100% of the net proceeds of certain sales of assets
be used to repay borrowings under the Credit Facility.

Covenants under the Credit Facility, among other things, (i) require the
Company to meet certain financial tests, including tests requiring the
maintenance of minimum interest coverage ratios, leverage ratios, levels of
liquidity, and cash flow ratios; (ii) require the Company to maintain certain
levels of collateral securing amounts outstanding under the Credit Facility;
(iii) limit the incurrence of additional indebtedness; (iv) limit purchases of
capital equipment and other capital expenditures; (v) restrict payments,
including dividends, with respect to shares of any class of capital stock; and
(vi) limit certain corporate acts of the Company, such as incurring debt,
creating liens and entering into certain types of

65
<PAGE>
business transactions, including mergers and joint ventures. The limitation on
mergers generally prohibits mergers other than acquisitions funded by the Credit
Facility or otherwise meeting certain requirements for such acquisitions,
including the requirements described above.

Events of default under the Credit Facility include, among other things, (i)
any failure to pay principal thereunder when due, or to pay interest or fees
within three business days after the date due; (ii) the breach of certain
covenants or the inaccuracy of certain representations or warranties made under
the Credit Facility; (iii) any failure to pay amounts due on certain
indebtedness, or defaults that result in or permit the acceleration of such
indebtedness; (iv) certain events of bankruptcy, insolvency, or dissolution; (v)
certain judgments or orders; (vi) certain seizures, condemnations, or similar
actions pertaining to the Company's assets or business; (vii) the invalidity of
the security interests granted under the Credit Facility; and (viii) a Change in
Control (as defined).

The Credit Facility permits the acquisitions of the OMI Chemical Carriers
and the Seal Fleet Vessels and the related assumption of Title XI debt,
incurrance of lease debt and making and delivery of promissory notes. See "Use
of Proceeds" and "Business--The Acquisitions." The Credit Facility limits the
Company's annual capital expenditures, including capital expenditures respecting
maintenance and improvements of existing vessels, to $10.0 million without the
consent of the lending banks. This limitation excludes (i) acquisitions made
with the $25.0 million vessel acquisition credit line, (ii) additional
indebtedness of $10.0 million that the Company is permitted to incur outside the
Credit Facility, (iii) acquisitions financed with proceeds of the Offering, and
(iv) the payment of amounts necessary to retire the Senior Notes, the Junior
Notes, and certain related party notes.

The Credit Facility provides that upon consummation of the Offering, the
Company must pay the banks a fee of $425,000.

In addition to the letter of credit available under the Credit Facility, the
Company has an available letter of credit issued by California Federal Bank in
the amount of $7.0 million. That letter of credit is pledged to the
owner-trustee of the Seabulk Magnachem and the U.S. Maritime Administration as
security for the Company's obligation to pay charter hire under the long-term
bareboat charter of that vessel. See "--Long-Term Charter Obligations--Title XI
Bonds." The Company anticipates that the letter of credit will no longer be
required as a result of the assumption of the Title XI debt associated with the
OMI Hudson and the OMI Dynachem.

The Company intends to fund part of the cash portion of the purchase price
of the OMI Chemical Carriers with $7.5 million of bank financing. Such financing
will be provided under a loan providing for equal monthly payments consisting of
principal and interest and a final balloon payment of $2.0 million plus accrued
but unpaid interest upon maturity of the loan in July 1999. The loan will bear
interest at a rate equal to the three-year U.S. Treasury Note rate as of the
closing of the Offering plus 1.82%.

SENIOR NOTES

The Senior Notes were issued in the aggregate principal amount of $25.0
million pursuant to that certain Senior Subordinated Note and Common Stock
Purchase Agreement dated September 30, 1994 (the "Senior Note Agreement"). The
Senior Notes were issued at a discount, resulting in proceeds to the Company of
approximately $23.1 million. The issuances of the Senior Notes and the Common
Stock issued in connection with the Senior Notes, resulted in total proceeds to
the Company of $25.0 million. The Senior Notes will mature in two equal
installments on September 30, 2003 and 2004, and bear interest at 12% per annum,
payable semi-annually in arrears on March 31 and September 30 of each year. The
Company at its option may prepay the Senior Notes at any time in whole or in
part in a minimum aggregate amount of $500,000, at a price equal to the
principal amount of the Senior Notes being prepaid, plus accrued interest. The
Senior Notes rank pari passu with all other Senior Subordinated Debt (as
defined).

Covenants under the Senior Note Agreement, among other things, (i) limit the
issuance of debt by the Company and of debt or preferred stock by the Company's
subsidiaries; (ii) restrict certain

66
<PAGE>
payments, including dividends, with respect to shares of any class of capital
stock or to repurchase or redeem capital stock or Subordinated Obligations (as
defined); (iii) limit certain corporate acts of the Company, including
permitting any of its subsidiaries to create or permit any restriction on the
subsidiaries' ability to pay dividends, make loans or advances, or transfer
assets or property to the Company; (iv) limit certain transactions by the
Company and its subsidiaries, including certain mergers or consolidations, asset
sales, sales of subsidiary stock, leases, other asset dispositions, transactions
with affiliates, creations of liens, and sale and leaseback transactions; and
(v) provide that upon a Change in Control (as defined), each holder of the
Senior Notes shall have the right to require that the Company repurchase such
holders' Senior Notes at a purchase price equal to 100% of principal plus
accrued and unpaid interest. In addition, the Company has agreed not to
consolidate with or merge into, sell all of its issued and outstanding capital
stock, or convey, transfer or lease all of its assets to another person unless
certain conditions are met.

Events of Default (as defined) under the Senior Note Agreement include (i)
failure to pay principal or interest when due; (ii) failure to comply with
certain restrictions on mergers, consolidations, and transfers of assets; (iii)
failure to comply with certain agreements and covenants in the Senior Notes and
the Senior Note Agreement; (iv) certain events of default on other indebtedness;
(v) certain events of bankruptcy; and (vi) the inaccuracy of any representation
or warranty.

The Company intends to repay $0.6 million of accrued interest on and $13.5
million of principal of the Senior Notes with a portion of the proceeds from the
Offering. To the extent the Underwriters' over-allotment option is exercised,
the net proceeds thereof will be used to repay an equal principal amount of the
remaining $11.5 million of outstanding Senior Notes and interest thereon. See
"Use of Proceeds" and "Capitalization."

JUNIOR NOTES

The Junior Notes were issued in the aggregate principal amount of $25.0
million pursuant to that certain Junior Subordinated Note and Common Stock
Purchase Agreement dated September 30, 1994 (the "Junior Note Agreement"). The
Junior Notes were issued at a discount, resulting in proceeds to the Company of
approximately $17.5 million. The issuances of the Junior Notes, the Common
Stock, and the Common Stock Contingent Share Issuances issued in connection with
the Junior Notes, resulted in total proceeds to the Company of $25.0 million.
The principal of and accrued interest on the Junior Notes are due and payable on
September 30, 2014; provided, however, that the Junior Notes must be prepaid
upon the closing of the Offering. This prepayment requirement will be amended
prior to the Offering. See "Description of Capital Stock--Recapitalization
Agreement." Interest accrues on the Junior Notes at a rate of 8% per annum,
compounded quarterly. The Company at its option may prepay the Junior Notes at
any time in whole or in part at a price equal to the principal amount of the
Junior Notes being prepaid, plus accrued interest. The Junior Notes are
subordinated to all Senior Debt (as defined).

Covenants under the Junior Note Agreement, among other things, provide that
upon a Change in Control (as defined), each holder of the Junior Notes shall
have the right to require that the Company repurchase such holders' Junior Notes
at a purchase price equal to 100% of principal plus accrued and unpaid interest.
In addition, the Company has agreed not to consolidate with or merge into, sell
all of its issued and outstanding capital stock, or convey, transfer or lease
all of its assets to another person unless certain conditions are met.

Events of Default (as defined) under the Junior Note Agreement include (i)
failure to pay principal or interest when due; (ii) failure to comply with
covenants; (iii) certain events of bankruptcy; (iv) certain judgments or
decrees; and (v) the inaccuracy of any representation or warranty.

Immediately prior to the consummation of the Offering, the outstanding
principal of and accrued but unpaid interest on the Junior Notes will total
$29.0 million, of which $15.1 million will be repaid from the proceeds of the
Offering. The outstanding principal balance of the Junior Notes will be

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exchanged for 55,500 shares of Class A Common Stock and 1,188,502 shares of
Class B Common Stock. See "Description of Capital Stock--Recapitalization
Agreement."

LONG-TERM CHARTER OBLIGATIONS

Title XI Bonds. Two of the Company's subsidiaries are parties to long-term,
"hell or high water" charters of the Seabulk Challenger and the Seabulk
Magnachem, the performance of which is guaranteed by the Company. Both vessels
were financed by the issuance of U.S. Government Guaranteed Ship Financing Bonds
issued pursuant to Title XI in leveraged lease transactions. As of December 31,
1995, approximately $4.2 million of 8.5% Title XI Bonds due 1999 relating to the
Seabulk Challenger was outstanding and approximately $7.3 million of 5.25% Title
XI Bonds due 2000 relating to the Seabulk Magnachem was outstanding. The
long-term charter for the Seabulk Challenger is coterminous with the maturity
date of the respective obligation, and the charter for the Seabulk Magnachem
terminates in 2002. The Company has the option to purchase the vessels or renew
the charters at fair market value and, with respect to the Seabulk Magnachem,
has the right to share in the residual value proceeds of any sale to a third
party.

In connection with the acquisition of the OMI Chemical Carriers, the Company
is assuming approximately $34.7 million of U.S. Government Guaranteed Ship
Financing Bonds issued pursuant to Title XI in five distinct series bearing
interest at an average rate of 7.65%.

Repayment of the Company's existing Title XI bonds and the Title XI bonds to
be assumed is guaranteed by the full faith and credit of the United States,
acting through the Maritime Administration. As security for such guarantee, the
vessels are mortgaged to the United States, and the subsidiaries that own or
charter the vessels are each party to a security agreement and a financial
agreement with the United States containing various operating covenants and
financial conditions that, among other things, restrict the ability of each to
(i) incur additional indebtedness, (ii) make certain loans, advances, or
investments, (iii) create certain liens, (iv) pay stock dividends, (v) sell,
transfer, or dispose of assets, (vi) change the nature of its business, (vii)
make capital expenditures, (viii) effect certain mergers, consolidations, or
similar business combinations, or (ix) enter into certain vessel charter
arrangements. The agreements specify various events of default, including
failure to pay charter hire, pay certain guarantee fees, satisfy certain
covenants, maintain required insurance, and maintain U.S. citizenship (within
the meaning of Section 2 of the Shipping Act, 1916) and certain events of
insolvency or bankruptcy. No consents or approvals are required under the
Company's existing Title XI bonds to consummate the Offering or accomplish the
Acquisitions.

Bareboat Charters. The Company is party to bareboat charters relating to
four offshore service vessels, two of which expire in June 2001 and two of which
expire in January 2002. See "Certain Transactions" and Note 4 to the Company's
consolidated financial statements. The Company has an option to purchase each of
these vessels for a nominal amount upon the expiration of the charters. The
Company is also party to two bareboat charters relating to a total of nine crew
boats. The charter on one crew boat expires in 2002 with an option to purchase
the vessel for $0.4 million. The charter on the remaining eight crew boats
expires in 2004 with an option to purchase the vessels for a nominal amount. In
addition, the Company is party to a bareboat charter on a tractor tug which
expires in 2010 with an option to purchase the vessel for $1.6 million.

ACQUISITION NOTES AND ASSUMED DEBT

In connection with the redemption in September 1994 of the Company's
outstanding preferred stock, the purchase of partnership interests in HOS, and
the purchase of partnership interests in HCL, the Company issued the unsecured
subordinated Founder's Note, HOS Notes, and HCL Notes, in the approximate
principal amounts of $3.6 million, $1.0 million, and $1.1 million, respectively.
See "Certain Transactions." The Founder's Note bears interest, payable
quarterly, at the greater of 12% per annum or prime plus 3%. The HOS and HCL
Notes bear interest at 12% per annum. A portion of the notes will be repaid in
cash with a portion of the proceeds from the Offering and a portion of the

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notes will be exchanged for shares of Class A Common Stock. See "Use of
Proceeds" and "Certain Transactions." Of the balance of $4.8 million of
currently remaining outstanding principal amount of such notes, $1.6 million
will be repaid in cash on the Founder's Note and $0.3 million will be repaid in
cash on the HCL and HOS Notes. In addition, $0.3 million of outstanding
principal on the HCL and HOS Notes will be exchanged for 25,667 shares of Class
A Common Stock.

In September 1994, the Company issued a $3.0 million promissory note (the
"Vessel Acquisition Note") in partial payment for the 20% minority interest in a
partnership that owned, directly or indirectly, eight of the Company's offshore
supply boats and substantially all of the Company's interests in its product
carrier and one of its chemical carriers. The unsecured note bears interest,
payable quarterly, at the lesser of 10% per annum or prime plus 2%. Principal on
the Vessel Acquisition Note is payable in five equal annual installments
commencing October 1, 1995. The Company will repay $2.4 million of outstanding
principal and accrued interest on the Vessel Acquisition Note with a portion of
the proceeds from the Offering.

<PAGE>
DESCRIPTION OF CAPITAL STOCK

The following summary description of the Company's capital stock is
qualified in its entirety by reference to the Articles of Incorporation and its
Amended and Restated Bylaws (the "Bylaws"), copies of which have been included
as exhibits to the Registration Statement of which this Prospectus is a part,
and reference to Florida law. All capitalized terms used and not defined below
have the respective meanings assigned to them in the Articles of Incorporation.

Upon consummation of the Offering, the authorized capital stock of the
Company will consist of 100,000,000 shares of Class A Common Stock, par value
$.001 per share, of which 7,485,291 shares will be issued and outstanding,
5,000,000 shares of Class B Common Stock, par value $.001 per share, of which
3,419,577 shares will be issued and outstanding, and 10,000,000 shares of
Preferred Stock, par value $1.00 per share, none of which will be issued and
outstanding. The Class A Common Stock and Class B Common Stock are in this
section collectively referred to as the "Common Stock."

COMMON STOCK

The holders of Common Stock are entitled to receive such dividends, in cash,
property or securities, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. The holders of Common Stock
are entitled to participate in dividends ratably on a per share basis. If
dividends consist of Common Stock or other voting securities of the Company, the
voting rights of each such security shall correspond to the voting rights of the
security held. Any dividend declared for one class of Common Stock must be
declared for the other classes of Common Stock. The holders of Common Stock have
no preemptive or redemption rights and are not subject to future calls or
assessments by the Company. Subject to the prior rights of holders, if any, of
any outstanding class or series of capital stock having a preference in relation
to the Common Stock as to distributions upon dissolution, liquidation, and
winding-up of the Company, holders of Common Stock are entitled to share ratably
in any assets of the Company that remain after payment in full of all debts and
liabilities of the Company.

The holders of Class A Common Stock and Class B Common Stock vote together
as a single class on all matters submitted to a vote of the stockholders,
including the election of directors, except as described below under "--Foreign
Ownership Restrictions" and as provided under Florida law. In all matters
submitted to a vote of the stockholders, including the election of directors,
and except as described below under "--Foreign Ownership Restrictions" and under
"--Certain Provisions of Articles of Incorporation and Bylaws," each share of
Class A Common Stock is entitled to one vote and each share of Class B Common
Stock is entitled to ten votes. The stockholders do not have cumulative voting
rights.

The Class B Common Stock can be owned only by (i) J. Erik Hvide and, subject
to certain limitations set forth in the Articles of Incorporation, any person
related to him by kinship or marriage, trusts or similar arrangements
established solely on the behalf of one or more of them, and partnerships and
other entities that are wholly owned by them (collectively, the "Hvide Family");
or (ii) the Investor Group and its affiliates. If the ownership or beneficial
interest in any share of Class B Common Stock ceases to be vested in any of
these persons, then such share will automatically and immediately convert into a
share of Class A Common Stock, although such a conversion will not occur where
Class B Common Stock is transferred from one Hvide Family member, upon death, to
another Hvide Family member.

Except as described below under "--Foreign Ownership Restrictions," each
holder of Class B Common Stock may elect at any time to convert any of his
shares, share for share, into Class A Common Stock.

Immediately after completion of the Offering, the Hvide Family and the
Investor Group will hold 51.7% and 48.3%, respectively, of the outstanding Class
B Common Stock. The Hvide Family and the Investor Group will thus own 16.2% and
18.4%, respectively, of the combined classes of Common Stock (14.8% and 16.8%,
respectively, if the Underwriters' over-allotment option is exercised in full)
and

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control 42.4% and 40.5%, respectively, of the voting power of such stock upon
completion of the Offering (41.4% and 39.5%, respectively, if the Underwriters'
over-allotment option is exercised in full) and will control the management and
affairs of the Company and any corporate actions requiring stockholder approval.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
stockholders, to issue from time to time shares of Preferred Stock in one or
more series and to fix, with respect to each series, the number of shares,
voting powers, designations, relative rights, preferences (including seniority
upon liquidation), privileges, and restrictions thereof. The rights,
preferences, privileges, and restrictions of different series of Preferred Stock
may differ with respect to dividend rates, amounts payable on liquidation,
voting rights, conversion rights, redemption provisions, sinking fund
provisions, and other matters. The Preferred Stock is subject to the dual stock
certificate system described below under "--Foreign Ownership Restrictions."

The issuance of Preferred Stock could decrease the amount of earnings and
assets available for distribution to holders of Common Stock, could adversely
affect the rights and powers, including voting and distribution rights, of
holders of Common Stock and could have the effect of delaying, deferring, or
preventing a change in control of the Company. Except as otherwise provided by
law, the holders of any series of Preferred Stock may be given the right, voting
separately as a class, to elect one or more directors of the Company. The term
of any such director would expire at the next succeeding annual meeting of
shareholders.

The Company has no present intention to issue any shares of Preferred Stock.

FOREIGN OWNERSHIP RESTRICTIONS

The Articles of Incorporation (i) contain provisions limiting the aggregate
percentage ownership by Non-Citizens of each class of the Company's capital
stock (including the Class A Common Stock and the Class B Common Stock) to
24.99% of the outstanding shares of each such class (the "Permitted Percentage")
to ensure that such foreign ownership will not exceed the maximum percentage
permitted by applicable federal law (presently 25.0%), (ii) require institution
of a dual stock certificate system to help determine such ownership, and (iii)
permit the Board of Directors to make such determinations as may reasonably be
necessary to ascertain such ownership and implement such limitations. These
provisions are intended to protect the Company's ability to operate its vessels
in the U.S. domestic trade governed by the Jones Act. The ability of the Company
to so operate is necessary to avoid default under certain of the Company's
financings, may enhance the Company's ability to incur additional debt, and may
have other effects upon the Company. See "Risk Factors--Restriction on Foreign
Ownership" and "Business--Environmental and Other Regulation--Coastwise Laws."

To provide a method to enable the Company reasonably to determine stock
ownership by Non-Citizens, the Articles of Incorporation require the Company to
institute (and to implement through the transfer agent for the Common Stock) a
dual stock certificate system, pursuant to which certificates representing
shares of Common Stock will bear legends that designate such certificates as
either "citizen" or "non-citizen," depending on the citizenship of the owner.
Accordingly, stock certificates are denominated as "citizen" (blue) in respect
of Class A Common Stock owned by Citizens and as "non-citizen" (red) in respect
of Class A Common Stock owned by Non-Citizens. The Company may also issue
non-certificated shares through depositories if the Company determines such
depositories have established procedures that allow the Company to monitor the
ownership of Common Stock by Non-Citizens.

For purposes of the dual stock certificate system, a "Non-Citizen" is
defined as any person other than a Citizen, and a "Citizen" is defined as: (i)
any individual who is a citizen of the U.S. by birth, naturalization, or as
otherwise authorized by law; (ii) any corporation (a) organized under the laws
of the U.S., or a state, territory, district, or possession thereof, (b) of
which title to not less than 75% of its stock is beneficially owned by and
vested in Citizens, free from any trust or fiduciary obligation in favor

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of Non-Citizens, (c) of which not less than 75% of the voting power is vested in
Citizens, free from any contract or understanding through which it is arranged
that such voting power may be exercised directly or indirectly in behalf of
Non-Citizens, (d) of which there are no other means by which control is
conferred upon or permitted to be exercised by Non-Citizens, (e) whose president
or chief executive officer, chairman of the board of directors and all officers
authorized to act in their absence or disability are Citizens, and (f) of which
more than 50% of that number of its directors necessary to constitute a quorum
are Citizens; (iii) any partnership (a) organized under the laws of the U.S., or
a state, territory, district, or possession thereof, (b) all general partners of
which are Citizens, and (c) of which not less than a 75% interest is
beneficially owned and controlled by, and vested in, Citizens, free and clear of
any trust or fiduciary obligation in favor of Non-Citizens; (iv) any association
(a) organized under the laws of the U.S., or a state, territory, district, or
possession thereof, (b) of which 100% of the members are Citizens, (c) whose
president, chief executive officer, or equivalent position, chairman of the
board of directors, or equivalent committee or body, and all persons authorized
to act in their absence or disability are Citizens, (d) of which not less than
75% of the voting power is beneficially owned by Citizens, free and clear of any
trust or fiduciary obligation in favor of Non-Citizens, and (e) of which more
than 50% of that number of its directors or equivalent persons necessary to
constitute a quorum are Citizens; (v) any limited liability company (a)
organized under the laws of the U.S., or a state, territory, district or
possession thereof, (b) of which not less than 75% of the membership interests
are beneficially owned by and vested in Citizens, free from any trust or
fiduciary obligation in favor of Non-Citizens, and the remaining membership
interests are beneficially owned by and vested in persons meeting the
requirements of 46 U.S.C. Sec.12102(a), (c) of which not less than 75% of the
voting power is vested in Citizens, free from any contract or understanding
through which it is arranged that such voting power may be exercised directly or
indirectly in behalf of Non-Citizens, (d) of which there are no other means by
which control is conferred upon or permitted to be exercised by Non-Citizens,
(e) whose president or other chief executive officer or equivalent position,
chairman of the board of directors or equivalent committee or body, managing
members (or equivalent), if any, and all persons authorized to act in their
absence or disability are citizens, free and clear of any trust or fiduciary
obligation in favor of any Non-Citizens, and (f) of which more than 50% of that
number of its directors or equivalent persons necessary to constitute a quorum
are Citizens; (vi) any joint venture, if not an association, corporation,
partnership, or limited liability company (a) organized under the laws of the
U.S., or a state, territory, district, or possession thereof, and (b) of which
100% of the equity is beneficially owned and vested in Citizens, free and clear
of any trust or fiduciary obligation in favor of any Non-Citizens; and (vii) any
trust (a) domiciled in and existing under the laws of the U.S., or a state,
territory, district, or possession thereof, (b) the trustee of which is a
Citizen, and (c) of which not less than a 75% interest is held for the benefit
of Citizens, free and clear of any trust or fiduciary obligation in favor of any
Non-Citizens. The foregoing definition is applicable at all tiers of ownership
and in both form and substance at each tier of ownership.

Shares of Common Stock are transferable to Citizens at any time and are
transferable to Non-Citizens if, at the time of such transfer, the transfer
would not increase the aggregate ownership by Non-Citizens of that particular
class of Common Stock above the Permitted Percentage in relation to the total
outstanding shares of that particular class Common Stock. In determining whether
the percentage of shares of Class A Common Stock beneficially owned by
Non-Citizens exceeds the Permitted Percentage, the total number of issued and
outstanding shares of Class A Common Stock and the total number of shares of
Class A Common Stock beneficially owned by Non-Citizens will be increased (i) by
185,056 shares until shares of Common Stock are issued pursuant to the CSI
Agreement (as described and defined under "Description of Capital
Stock--Contingent Share Issuance Agreement"), and (ii) by 131,735 shares until
the earlier to occur of (x) conversion to Common Stock or (y) the redemption of
the Company's Junior Notes (See "Description of Certain Indebtedness-- Junior
Notes"). Non-Citizen certificates may be converted to Citizen certificates upon
a showing, satisfactory to the Company, that the holder is a Citizen. Any
purported transfer to Non-Citizens of shares or of an interest in shares of the
Company represented by a Citizen certificate in excess of the

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Permitted Percentage will be ineffective as against the Company for all purposes
(including for purposes of voting, dividends, and any other distribution, upon
liquidation or otherwise). In addition, the shares may not be transferred on the
books of the Company, and the Company, whether or not such stock certificate is
validly issued, may refuse to recognize the holder thereof as a stockholder of
the Company except to the extent necessary to effect any remedy available to the
Company. Subject to the foregoing limitations, upon surrender of any stock
certificate for transfer, the transferee will receive citizen (blue)
certificates or non-citizen (red) certificates, as applicable.

The Articles of Incorporation establish procedures with respect to the
transfer of shares to enforce the limitations referred to above and authorize
the Board of Directors to implement such procedures. The Board of Directors may
take other ministerial actions or make interpretations of the Company's foreign
ownership policy as it deems necessary in order to implement the policy.
Pursuant to the procedures established in the Articles of Incorporation, as a
condition precedent to each issuance and/or transfer of stock certificates
representing shares of Common Stock (including the shares of Class A Common
Stock being sold in the Offering), a citizenship certificate will be required
from all transferees (and from any recipient upon original issuance) of Common
Stock and, with respect to the beneficial owner of the Common Stock being
transferred, if the transferee (or the original recipient) is acting as a
fiduciary or nominee for such beneficial owner. The registration of the transfer
(or original issuance) will be denied upon refusal to furnish such citizenship
certificate, which must provide information about the purported transferee's or
beneficial owner's citizenship. Furthermore, as part of the dual stock
certificate system, depositories holding shares of the Company's Common Stock
will be required to maintain separate accounts for "Citizen" and "Non-Citizen"
shares. When the beneficial ownership of such shares is transferred, the
depositories' participants will be required to advise such depositories as to
which account the transferred shares should be held. In addition, to the extent
necessary to enable the Company to determine the number of shares owned by
Non-Citizens, the Company may from time to time require record holders and
beneficial owners of shares of Common Stock to confirm their citizenship status
and may, in the discretion of the Board of Directors, temporarily withhold
dividends payable to, and deny voting rights to, any such record holder or
beneficial owner until confirmation of citizenship is received.

Should the Company (or its transfer agent for the Common Stock) become aware
that the ownership by Non-Citizens of Common Stock at any time exceeds the
Permitted Percentage (the "Excess Shares"), the Board of Directors is authorized
to withhold dividends and other distributions temporarily on the Excess Shares,
pending the transfer of such shares to a Citizen or the reduction in the
percentage of shares owned by Non-Citizens to or below the Permitted Percentage,
and to deny voting rights with respect to the Excess Shares. If dividends and
distributions are to be withheld, they will be set aside for the account of the
Excess Shares. At such time as such shares are transferred to a Citizen or the
ownership of such shares by Non-Citizens will not result in aggregate ownership
by Non-Citizens in excess of the Permitted Percentage, the dividends withheld
shall be paid to the then record holders of the related shares. Excess Shares
shall, so long as the excess exists, not be deemed to be outstanding for
purposes of determining the vote required on any matter brought before the
stockholders for a vote. The Articles of Incorporation provide that the Board of
Directors has the power, in its reasonable discretion and based upon the records
maintained by the Company's transfer agent, to determine those shares of Common
Stock that constitute the Excess Shares. Such determination will be made by
reference to the date or dates on which such shares were purchased by
Non-Citizens, starting with the most recent acquisition of shares by a
Non-Citizen and including, in reverse chronological order, all other
acquisitions of shares by Non-Citizens from and after the acquisition that first
caused the Permitted Percentage to be exceeded; provided that Excess Shares
resulting from a determination that a record holder or beneficial owner is no
longer a Citizen will be deemed to have been acquired as of the date of such
determination.

To satisfy the Permitted Percentage described above, the Articles of
Incorporation authorize the Board of Directors, in its discretion, to redeem
(upon written notice) Excess Shares in order to reduce the aggregate ownership
by Non-Citizens to the Permitted Percentage. As long as the shares of Class A

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Common Stock offered hereby continue to be authorized for quotation on the
Nasdaq National Market, the redemption price will be the average of the closing
sale price of the shares (as reported by the Nasdaq National Market) during the
30 trading days next preceding the date of the notice of redemption. The
redemption price for Excess Shares will be payable in cash. In the event the
Company is not permitted by applicable law to make such redemption or the Board
of Directors, in its discretion, elects not to make such redemption, the Company
will give notice to the holders of Class B Common Stock and those of whom are
Citizens may elect to purchase their pro rata portion of the Excess Shares by
delivering written notice of such election within 30 days of receipt of the
Company's notice.

POSSIBLE ANTI-TAKEOVER PROVISIONS

Florida Business Corporation Act. The Company is subject to Sections
607.0901 and 607.0902 of the Florida Business Corporation Act ("FBCA"), which
regulate the acquisition and exercise of corporate control.

Under Section 607.0902 of the FBCA, "control shares" of certain corporations
acquired in a "control share acquisition," with certain exceptions, have no
voting rights unless such rights are granted pursuant to a vote of the holders
of a majority of the corporation's voting stock (excluding all "interested
shares"). "Control shares" are shares that, when added to all other shares which
a person owns or has the power to vote, would give that person any of the
following ranges of voting power: (i) one-fifth or more but less than one-third
of the voting power; (ii) one-third or more but less than a majority of the
voting power; and (iii) more than a majority of the voting power. A "control
share acquisition" is the acquisition of ownership of, or the power to vote,
outstanding control shares. Shares acquired within 90 days, or as part of a plan
to effectuate a control share acquisition, are deemed to have been acquired in
the same transaction. "Interested shares" include shares held by the person
attempting to effectuate the control share acquisition or any officer or
employee-director of the corporation. A corporation may elect to not be governed
by Section 607.0902 of the FBCA in its articles of incorporation or bylaws.

Section 607.0901 of the FBCA requires that certain transactions between an
interested stockholder (in general, a stockholder that beneficially owns more
than 10% of a corporation's outstanding voting stock) and a corporation be
approved by the affirmative vote of the holders of two-thirds of the
corporation's voting shares (excluding those shares beneficially owned by the
interested stockholder). In general, such approval will not be required if the
transaction is approved by a majority of disinterested directors, the interested
stockholder has been the beneficial owner of at least 80% of the corporation's
outstanding voting stock for at least the preceding five years, the interested
stockholder is the beneficial owner of at least 90% of the outstanding voting
stock of the corporation (excluding stock acquired directly from the corporation
in a transaction not approved by a majority of the disinterested directors), or
the consideration paid in the affiliated transaction satisfies the statutory
"fair price" formula and certain other conditions are met. Transactions covered
by Section 607.0901 include mergers, consolidations, sales of assets having an
aggregate fair market value of 5% or more of the aggregate fair market value of
all the corporation's assets on a consolidated basis or of all the corporation's
outstanding stock or representing 5% or more of the corporation's earning power
or net income on a consolidated basis, transfers of shares having an aggregate
fair market value of 5% or more of the aggregate fair market value of all
outstanding shares of the corporation, liquidations, dissolutions,
reclassifications, recapitalizations, and loans. A corporation may elect, by the
vote of a majority of the outstanding voting stock (not including shares held by
an interested stockholder), by amending such corporation's articles of
incorporation or bylaws, to not be subject to the provisions of Section 607.0901
of the FBCA. Any such election, however, will not be effective until 18 months
after it is made, and will not apply to any affiliated transaction between such
corporation and someone who was an interested stockholder prior to the effective
date of such amendment.

Each of the foregoing provisions of the FBCA could have the effect of
delaying or making it more difficult to effect a change of control or management
of the Company, even though such a change may be beneficial to the Company and
its stockholders.

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Dual Classes of Common Stock. The Class A Common Stock entitles its holders
to one vote per share, and the Class B Common Stock entitles its holders to ten
votes per share. Accordingly, the Hvide Family and the Investor Group, as the
holders of all the outstanding Class B Common Stock, if they vote together, will
be able to control the vote on all matters submitted to a vote of the holders of
the Common Stock, and such control may have the effect of discouraging certain
types of transactions involving an actual or potential change of control of the
Company, including transactions in which the holders of Class A Common Stock
might otherwise receive a premium for their shares over then-current market
prices.

Board of Directors. In all elections of directors, except elections, if any,
for directors for Preferred Stock, as described in "--Preferred Stock," each
share of Class A Common Stock is entitled to one vote and each share of Class B
Common Stock is entitled to ten votes, and neither class has cumulative voting
rights. The Hvide Family and the Investor Group, under the terms of the
Shareholders Agreement, will have the ability to nominate eight and three
members, respectively, of the Company's 11-member Board of Directors, who are
elected by the holders of Class A Common Stock and Class B Common Stock, voting
together as a class. In addition, pursuant to the Articles of Incorporation, the
Board of Directors will be divided into three classes of directors serving
staggered three-year terms as well as directors, if any, for Preferred Stock who
serve one-year terms. As a result, approximately one third of the Board of
Directors is elected each year. Each of these provisions could have the effect
of delaying or making it more difficult to effect a change in control or
management of the Company, even though such a change may be beneficial to the
Company and its stockholders.

Restrictions on Taking Stockholder Action. The Company's Bylaws provide that
a stockholder must notify the Company in advance of such holder's intent to
bring up items of business or nominate directors at any annual meeting of
stockholders. With respect to other items of business, the Bylaws provide that a
stockholder's notice must be given in accordance with the procedures set forth
in Rule 14a-8 of Regulation 14A under the Securities Exchange Act of 1934, as
amended, which generally requires that such proposals be received by the Company
not less than 120 days prior to the anniversary date that proxy solicitation
materials were sent out for the immediately preceding annual meeting of
stockholders of the Company. As permitted by the FBCA, pursuant to the Company's
Articles of Incorporation, stockholders may only call a special meeting of
stockholders when the holders of not less than 50% of the shares entitled to
vote make written demand on the Company for such a meeting.

Authorized but Unissued Capital Stock. One of the effects of the existence
of authorized but unissued Common Stock and undesignated Preferred Stock may be
to enable the Board of Directors to make more difficult or to discourage an
attempt to obtain control of the Company by means of a merger, tender offer,
proxy contest, or otherwise, and thereby to protect the continuity of the
Company's management. If, in the exercise of its fiduciary obligations, the
Board of Directors were to determine that a takeover proposal was not in the
Company's best interest, such shares could be issued by the Board of Directors
without stockholder approval in one or more transactions that might prevent or
make more difficult or costly the completion of the takeover transaction by
diluting the voting or other rights of the proposed acquiror or insurgent
stockholder group, by creating a substantial voting block in institutional or
other hands that might undertake to support the position of the incumbent Board
of Directors, by effecting an acquisition that might complicate or preclude the
takeover, or otherwise. In this regard, the Articles of Incorporation grant the
Board of Directors broad power to establish the rights and preferences of the
authorized and unissued Preferred Stock, one or more series of which could be
issued entitling holders (i) to vote separately as a class on any proposed
merger or consolidation, (ii) to cast a proportionately larger vote together
with the Common Stock on any such transaction or for all purposes, (iii) to
elect directors having terms of office or voting rights greater than those of
other directors, (iv) to convert Preferred Stock into a greater number of shares
of Common Stock or other securities, (v) to demand redemption at a specified
price under prescribed circumstances related to a change of control, or (vi) to
exercise other rights designated to impede a takeover. The issuance of shares of
Preferred Stock pursuant to the Board of Directors' authority described above
may adversely effect the rights of holders of the Common Stock.

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CERTAIN PROVISIONS OF ARTICLES OF INCORPORATION AND BYLAWS

Rights of Approval. So long as the Investor Group owns at least 5% of the
Company's outstanding Class B Common Stock, subject to the following exception,
the following actions must be approved by holders of at least 95% of the Class B
Common Stock: (i) engagement of the Company or its subsidiaries in any material
new business; (ii) a merger involving the Company or a sale of all or
substantially all of the Company's assets; (iii) a recapitalization or voluntary
bankruptcy filing; (iv) a capital investment, acquisition, or asset sale in
excess of $5 million; (v) borrowings or issuances of securities in excess of $5
million; or (vi) amendment to the Articles of Incorporation reducing or
delegating the authority of the Board of Directors or affecting the rights of
holders of shares of Class B Common Stock. After September 30, 1999, however, a
merger or sale of substantially all of the Company's assets no longer will
require the approval of holders of 95% of the Class B Common Stock. In addition,
so long as the Investor Group owns at least 25% of the Company's outstanding
Class B Common Stock, the appointment of a new chief executive officer must be
approved by the holders of at least 75% of the Class B Common Stock.

Liability of Directors and Officers. The FBCA permits corporations to (i)
include provisions in their articles of incorporation that limit the personal
liability of directors for monetary damages resulting from breaches of the duty
of care, subject to certain exceptions, and (ii) indemnify directors and
officers, among others, in certain circumstances for their expenses and
liabilities incurred in connection with defending pending or threatened suits.

The Articles of Incorporation include a provision that eliminates the
personal liability of a director to the Company and its stockholders for
monetary damages resulting from breaches of the duty of care to the fullest
extent permitted by the FBCA and further provide that any amendment or repeal of
that provision will not adversely affect any right or protection of a director
of the Company existing at the time of such amendment, modification, or repeal
to any director for acts or omissions occurring prior to such amendment.

Pursuant to the Articles of Incorporation, the Board of Directors has
indemnified the Company's current and former directors, officers, employees, and
agents to the fullest extent permitted, from time to time, under the FBCA as
presently or hereafter in effect. The Company also may enter into agreements
providing for greater or different indemnification of any of these persons. The
Company maintains an insurance policy covering the liability of its directors
and officers for actions taken in their official capacity.

Citizenship of Directors and Officers. The Company's Bylaws provide that the
Chairman of the Board of Directors, Chief Executive Officer, President, and all
Vice Presidents must be Citizens, and restrict any officer who is not a Citizen
from acting in the absence or disability of such persons. The Bylaws further
provide that the number of Non-Citizen directors shall not exceed a minority of
the number necessary to constitute a quorum for the transaction of business. See
"Business--Environmental and Other Regulation--Coastwise Laws."

RECAPITALIZATION AGREEMENT

The Company, the Investor Group, J. Erik Hvide, and the Hvide Trusts have
entered into a recapitalization agreement (the "Recapitalization Agreement")
simultaneously with the execution of the Underwriting Agreement. Under the
Recapitalization Agreement, the parties have agreed that immediately prior to
the Offering, 74,704 shares of the 452,518 Class B Common Stock owned by the
Investor Group will be converted into 74,704 shares of Class A Common Stock, the
313,215 shares of Class C Common Stock owned by the Investor Group will be
converted into 229,062 shares of Class A Common Stock and 84,153 shares of Class
B Common Stock and the 663,415 shares of Class C Common Stock owned by J. Erik
Hvide and the Hvide Trusts will be converted into 663,415 shares of Class B
Common Stock. In addition, the parties have agreed to the application of $29.2
million of the proceeds of the Offering to repay $14.1 million of principal and
accrued but unpaid interest on the Senior Notes and $15.1 million of the
principal and accrued but unpaid interest on the Junior Notes.

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Under the Recapitalization Agreement, the parties have agreed the outstanding
principal amount of the Junior Notes will be converted into an aggregate of
55,500 shares of Class A Common Stock and 1,188,502 shares of Class B Common
Stock. To the extent that the Underwriters' over-allotment option is exercised,
the net proceeds therefrom will be used to repay an equal principal amount of
the remaining $11.5 million of outstanding Senior Notes and interest thereon.
The parties have entered into a new shareholders agreement, a restated
contingent share issuance agreement, and a registration rights agreement, all as
described below.

SHAREHOLDERS AGREEMENT

In connection with the September 30, 1994 issuance of the Senior Notes and
the Junior Notes the Company, J. Erik Hvide, the Hvide Trusts, and the Investor
Group entered into an agreement granting certain voting and approval rights to
the Investor Group and the Hvide Family. Immediately prior to the Offering, that
agreement was terminated and Mr. Hvide, the Hvide Trusts, and the Investor Group
entered into a new agreement (the "Shareholders Agreement") that provides as
follows:

Designations to the Board of Directors. The Investor Group may initially
nominate three persons to the Board of Directors and must vote all its shares so
as to elect eight other persons nominated to the Board of Directors by Mr. J.
Erik Hvide. Of these eight nominees, one will be Mr. Hvide, no more than three
others may be employees of the Company, its subsidiaries or members of the Hvide
Family, and the remainder must be independent of Mr. Hvide, the Company, and its
subsidiaries. In addition,
J. Erik Hvide and the Hvide Trusts must vote their shares to elect the three
Investor Group nominees. The number of nominees that the Investor Group is
entitled to designate will be reduced by one at such times as the Investor
Group's Primary Economic Interest (as defined in the Shareholders Agreement)
drop below 20%, 10%, and 5%, respectively, of the Company's outstanding Common
Stock. The Investor Group may remove their nominees, with or without cause, and
may nominate successors to their nominees. All director nominees must be U.S.
citizens.

Right of First Refusal. Mr. Hvide (together with the Hvide Trusts) and the
Investor Group, respectively, have granted a right of first refusal for each to
purchase the other's stock in certain circumstances.

Share Adjustment. The Investor Group has agreed that, if following the
issuance of the CSIs (as defined below), the aggregate votes held by the
Investor Group by virtue of its ownership of Class A and Class B Common Stock
would exceed the votes held by the Hvide Family by virtue of its ownership of
Class A and Class B Common Stock, the Investor Group will convert sufficient
Class B Common Stock to Class A Common Stock to allow the Hvide Family to
maintain a one vote majority over the Investor Group.

CONTINGENT SHARE ISSUANCE AGREEMENT

Also in connection with the issuance of the Junior Notes, the Company and
the Investor Group entered into a Contingent Share Issuance Agreement. The
agreement, as to be amended and restated pursuant to the Recapitalization
Agreement (the "CSI Agreement"), provides for the issuance of additional shares
of Class A Common Stock to the purchasers of the Junior Notes to the extent
necessary for such purchasers to earn a specified All-in Return (as defined by
the CSI Agreement) on their investment. Mr. Hvide and the Hvide Trusts agreed in
the Shareholders Agreement to contribute to the Company a number of shares of
Class B Common Stock equal to the number of shares of Common Stock issued by the
Company pursuant to the CSI Agreement.

Pursuant to the CSI Agreement, the Company issued to the purchasers of the
Junior Notes two series of Common Stock Contingent Share Issuances ("CSIs") that
are convertible into shares of Class A Common Stock on June 10, 1997 (300 days
following completion of the Offering). The number of shares of such stock
issuable with respect to the first series of CSIs is the lesser of (i) that
number necessary to cause the All-in Return (as defined below) to equal 60% and
(ii) a number of shares equal to 9.375% of the outstanding shares of the
Company's Common Stock on a fully-diluted basis, without giving effect to the
offering or the CSI issuance. The number of shares issuable with respect to the

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second series of CSIs is equal to the lesser of (i) that number necessary to
cause the All-in Return to equal 35% and (ii) a number of shares equal to 12.5%
of the outstanding shares of the Company's Common Stock on a fully-diluted
basis, without giving effect to the Offering or the CSI issuance. The value of
the shares of Class A Common Stock issuable upon conversion of the CSIs is based
upon the average market price of the Class A Common Stock during the 30 trading
days preceding June 10, 1997 (the "Valuation Period"). "All-in Return" is
defined as the annual rate of return earned by the purchasers of the Junior
Notes with respect to their aggregate investment in the Junior Notes, the shares
of Common Stock issued to them in connection with their purchase of the Junior
Notes, and the shares of Common Stock issued to them upon conversion of the
CSIs. Accordingly, as calculated pursuant to such formulas, the maximum number
of shares of Class A Common Stock issuable with respect to the first and second
series of CSIs is 237,641 and 316,855 shares, respectively.

While it is not possible to predict the future market value of the Company's
Common Stock, barring a dramatic increase in the average market price of the
Class A Common Stock during the Valuation Period, the Company will issue to the
Investor Group following the Valuation Period all 237,641 shares of Class A
Common Stock issuable under the first series of CSIs. With respect to the shares
issuable under the second series of CSIs, if the average market price of the
Class A Common Stock during the Valuation Period is less than $16.63 per share,
the Company will issue to the Investor Group following the Valuation Period all
316,855 shares of Class A Common Stock issuable under the second series of CSIs.
However, to the extent the average market price of the Class A Common Stock is
greater than $16.63, the number of shares of Class A Common Stock will be
reduced, and no second series CSI shares will be issuable in the event the
average market price of the Class A Common Stock during the Valuation Period
exceeds $19.25 per share. If all 554,496 shares of Class A Common Stock issuable
under the CSIs are issued, the Investor Group's ownership would increase from
18.4% to 23.5% of the outstanding shares of Common Stock and Mr. Hvide's
ownership would be reduced from 16.2% to 11.1% of the outstanding shares. The
Investor Group has agreed, however, that if following the issuance of the CSIs,
the aggregate votes held by the Investor Group would exceed the votes held by
the Hvide Family, the Investor Group will convert sufficient Class B Common
Stock to Class A Common Stock to allow the Hvide Family to maintain a one-vote
majority over the Investor Group. See "-- Shareholders Agreement--Share
Adjustment."

REGISTRATION RIGHTS AGREEMENT

In connection with the Recapitalization Agreement the Company and the
Investor Group have entered into a registration rights agreement (the
"Registration Rights Agreement"). Under the Registration Rights Agreement, the
Investor Group has the right to demand that its shares of Common Stock be
registered for sale pursuant to the requirements of the Securities Act, up to
three times, subject to certain deferral rights of the Company. Each of the
members of the Investor Group has the right to request that its shares be
included in any registered underwritten public offering of the Company's Common
Stock, subject to certain cutbacks.

TRANSFER AGENT

The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, LLC, New York, New York.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, 7,485,291 shares of Class A Common Stock
and 3,419,577 shares of Class B Common Stock will be outstanding, of which the
7,000,000 shares of Class A Common Stock offered hereby (assuming the
Underwriters' over-allotment option is not exercised) will be transferable
without restriction under the Securities Act, except for shares acquired by
"affiliates" of the Company (as defined in Rule 144 under the Securities Act
("Rule 144")). Of the 3,904,868 shares beneficially owned by the Company's
existing stockholders, all may become eligible for resale at various times under
Rule 144 or otherwise.

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In general, under Rule 144, a person (or persons whose shares are
aggregated) (i) who is not an "affiliate," as that term is defined below, and
whose shares have been outstanding and not owned by an "affiliate" for at least
two years, or (ii) who is an "affiliate" and has beneficially owned his or its
shares for a period of at least two years, is entitled to sell, within any
90-day period, such number of shares that does not exceed the greater of (i) one
percent (1%) of the then-outstanding shares or (ii) the average weekly trading
volume of the then outstanding shares during the four calendar weeks next
preceding each such sale. Resales under Rule 144 are also subject to certain
notice and manner of sale requirements, and the availability of current public
information about the Company. A person (or persons whose shares are aggregated)
who is not deemed an "affiliate" of the Company at any time during the three
months next preceding a sale by such person (or persons) and who has
beneficially owned shares of Common Stock that were not acquired from the
Company or an "affiliate" of the Company within the previous three years, would
be entitled to sell such shares under Rule 144(k) without regard to volume
limitations, manner of sale provisions, notification requirements, or the
availability of current public information concerning the Company. Affiliates
continue to be subject to the restrictions and requirements of Rule 144. As
defined in Rule 144, an "affiliate" of an issuer is a person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such issuer.

The members of the Investor Group, who beneficially own 359,266 shares of
Class A Common Stock and 1,650,470 shares of Class B Common Stock in the
aggregate (4.8% of the Class A Common Stock and 48.3% of the outstanding shares
of Class B Common Stock upon completion of the Offering, or 40.5% of the voting
power of the Common Stock, assuming the Underwriters' over-allotment option is
not exercised), have executed lock-up agreements pursuant to which they have
agreed not to demand the registration of, offer, sell, contract to sell, or
otherwise dispose of, except to other members of the Investor Group or
affiliates thereof, any of their shares of Common Stock for a period of 365 days
after the date of this Prospectus, without the prior written consent of the
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"). In addition, the
Company's other current stockholders, including Mr. Hvide and the Hvide Trusts,
who beneficially own 126,025 shares of Class A Common Stock and 1,769,107 of
Class B Common Stock in the aggregate (1.7% of the Class A Common Stock and
51.7% of the Class B Common Stock upon completion of the Offering, or 42.7% of
the voting power of the Common Stock, assuming the Underwriters' over-allotment
option is not exercised), have executed lock-up agreements pursuant to which
they have agreed not to sell, or otherwise dispose of, any of their shares of
Common Stock for a period 180 days after the date of this Prospectus, without
the prior written consent of DLJ. All other executive officers and directors
have also agreed not to offer, sell, contract to sell, or otherwise dispose of,
directly or indirectly, any of their shares of Common Stock for a period of 180
days after the date of this Prospectus without the prior written consent of the
Representatives of the Underwriters.

The Company will grant registration rights to certain stockholders. See
"Description of Capital Stock--Registration Rights Agreement."

Prior to the Offering, there has been no public market for the Common Stock
and no predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price prevailing from time to time. Nevertheless, sales of substantial amounts
of such shares in the public market could adversely affect the prevailing market
price of the Common Stock and could impair the Company's future ability to raise
capital through an offering of its equity securities.

As part of its business plan, the Company may, from time to time, issue
shares of Common Stock or Preferred Stock to finance future vessel improvements,
acquisitions, and other transactions. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources" and "Business--Strategy."

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UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement") among the Company and each of the underwriters
named below (the "Underwriters"), the Company has agreed to sell to each of the
Underwriters, and each of the Underwriters, for whom DLJ and Howard, Weil,
Labouisse, Friedrichs Incorporated are acting as representatives (the
"Representatives"), have severally agreed to purchase from the Company the
number of shares of Class A Common Stock set forth below opposite their
respective names. The Underwriters are committed to purchase all of such shares
if any are purchased. Under certain circumstances, the commitments of non-
defaulting Underwriters may be increased as set forth in the Underwriting
Agreement.

NUMBER OF
UNDERWRITERS SHARES
- ---------------------------------------------------------------- ---------

Donaldson, Lufkin & Jenrette Securities Corporation............. 2,577,500
Howard, Weil, Labouisse, Friedrichs Incorporated................ 2,577,500
Bear, Stearns & Co. Inc. ....................................... 90,000
BT Securities Corporation....................................... 90,000
Goldman, Sachs & Co. ........................................... 90,000
Lehman Brothers Inc. ........................................... 90,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............. 90,000
NatWest Securities Limited...................................... 90,000
Oppenheimer & Co., Inc. ........................................ 90,000
PaineWebber Incorporated........................................ 90,000
Prudential Securities Incorporated.............................. 90,000
Salomon Brothers Inc............................................ 90,000
Schroder Wertheim & Co. ........................................ 90,000
Smith Barney Inc. .............................................. 90,000
George K. Baum and Company...................................... 45,000
Carr Securities Corp. .......................................... 45,000
Jefferies & Company Inc. ....................................... 45,000
Johnson Rice & Company L.L.C. .................................. 45,000
Kirkpatrick, Pettis, Smith, Polian Inc. ........................ 45,000
Ladenburg, Thalmann & Co. Inc. ................................. 45,000
Morgan Keegan & Company, Inc. .................................. 45,000
Petrie Parkman & Co. ........................................... 45,000
Rauscher Pierce Refsnes, Inc. .................................. 45,000
Raymond James & Associates, Inc. ............................... 45,000
The Robinson-Humphrey Company, Inc. ............................ 45,000
Sanders Morris Mundy Inc........................................ 45,000
Simmons & Company International................................. 45,000
Southcoast Capital Corporation.................................. 45,000
Southeast Research Partners, Inc. .............................. 45,000
Southwest Securities, Inc. ..................................... 45,000
Van Kasper & Company............................................ 45,000
---------
Total....................................................... 7,000,000
---------
---------

The Representatives have advised the Company that the Underwriters propose
to offer the shares of Class A Common Stock to the public initially at the
public offering price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $0.50 per
share. The Underwriters may allow, and such dealers may re-allow, a discount not
in excess of $0.10 per share

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on sale to certain other dealers. After the initial public offering of the Class
A Common Stock, the public offering price, concession, and discount may be
changed.

The Company has granted the Underwriters an option, exercisable by the
Representatives, to purchase up to 1,050,000 additional shares of Class A Common
Stock, at the initial public offering price, less the underwriting discount.
Such option, which expires 30 days after the date of this Prospectus, may be
exercised solely to cover over-allotments. To the extent the Representatives
exercise such option, each of the Underwriters will be obligated, subject to
certain conditions, to purchase approximately the same percentage of the option
shares as the number of shares of Class A Common Stock to be purchased initially
by that Underwriter bears to the total number of shares to be purchased
initially by the Underwriters.

The initial public offering price for the Class A Common Stock in the
Offering will be determined by negotiations among the Company and the
Representatives. Among the factors to be considered in determining the initial
public offering price include the history of and the prospects for the industry
in which the Company competes, the past and present operations of the Company
and the historical results of operations of the Company, the prospects for
future earnings of the Company, the general condition of the securities markets
at the time of the Offering, the ability of the Company's management, and the
recent market prices of securities of generally comparable companies. There can
be no assurance that an active trading market will develop for the Class A
Common Stock or that the Class A Common Stock will trade in the public market
subsequent to the Offering at or above the initial public offering price.

The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments the Underwriters may be required to make in respect thereof.

The Class A Common Stock has been approved for listing on the Nasdaq
National Market under the symbol "HMAR."

In accordance with applicable rules of the National Association of
Securities Dealers, Inc. ("NASD"), no NASD member participating in the
distribution is permitted to confirm sales to accounts over which it exercises
discretionary authority without prior written consent, and, accordingly, each
Underwriter intends to abide by such rules.

In connection with the Offering, the Company's officers and directors and
certain of its stockholders, other than the Investor Group, have agreed that,
during a period of 180 days from the date of this Prospectus, such holders will
not, without the prior written consent of the DLJ, directly or indirectly,
offer, sell, grant any option with respect to, pledge, hypothecate, or otherwise
dispose of, any shares of Common Stock. The members of the Investor Group have
agreed that, during a period of 365 days from the date of this Prospectus, they
will not, without the prior written consent of the DLJ, other than to other
members of the Investor Group or affiliates thereof, offer, sell, grant any
option with respect to, pledge, hypothecate, or otherwise dispose of, or demand
or request the registration of, any shares of Common Stock under the Securities
Act or otherwise exercise any registration rights with respect thereto. In
addition, the Company has agreed that, during a period of 180 days from the date
of this Prospectus, the Company will not, without the prior written consent of
the Representatives, directly or indirectly, offer, sell, grant any option with
respect to, pledge, hypothecate, or otherwise dispose of any shares of Class A
Common Stock or Class B Common Stock except for (i) shares of Class A Common
Stock to be issued in the Offering, and (ii) shares issued upon the exercise of
options to be granted under the various employee and director benefit plans, as
described under "Management."

At the request of the Company, the Underwriters have reserved up to 400,000
shares of Common Stock for offering and sale at the initial public offering
price to employees, their family members and certain individuals and entities
with whom the Company has relationships. The number of shares

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available for sale to the general public will be reduced to the extent such
individuals and entities purchase such reserved shares. Any reserved shares not
so purchased will be offered by the Underwriters to the general public on the
same terms as the other shares offered hereby. Reserved shares purchased by such
individuals and entities will, except as restricted by applicable securities
law, be available for resale following the Offering. In addition, officers of
the Company and members of their families who purchase a portion of such
reserved shares will be required to represent to the Company and the
Underwriters that he or she is purchasing the shares for investment purposes
only with no present intention to resell the shares.

LEGAL MATTERS

Certain legal matters in connection with the validity of the issuance of the
Common Stock offered hereby are being passed upon for the Company by Dyer Ellis
& Joseph PC, Washington, D.C. Certain legal matters in connection with the
Offering will be passed upon for the Underwriters by Akin, Gump, Strauss, Hauer
& Feld, L.L.P.

EXPERTS

The consolidated financial statements of Hvide Marine Incorporated and
subsidiaries at December 31, 1995 and 1994 and for each of the three years in
the period ended December 31, 1995, and the statements of assets to be sold of
Gulf Boat Marine Services, Inc. and E&D Boat Rentals, Inc. as of September 30,
1994 and 1995, and the related statements of vessel operations for the years
then ended, appearing in this Prospectus and Registration Statement have been
audited by Ernst & Young LLP, independent certified public accountants, as set
forth in their reports thereon, appearing elsewhere herein and in the
Registration Statement, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.

The combined financial statements of OMI Chemical Carrier Group at December
31, 1995 and 1994 and for each of the three years in the period ended December
31, 1995 appearing in this Prospectus and Registration Statement have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein, and are included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

The financial statements of the Seal Fleet Vessels at December 31, 1995 and
1994 and for each of the three years in the period ended December 31, 1995,
appearing in this Prospectus and Registration Statement have been audited by
Pannell Kerr Forster of Texas, P.C., independent certified public accountants,
as set forth in their reports thereon appearing elsewhere herein and in the
Registration Statement, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") pursuant to the Securities Act, with respect to the Class A Common
Stock offered hereby. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements made in
this Prospectus as to the contents of any contract, agreement, or other document
are summaries of the material terms of such contract, agreement, or document.
With respect to each such contract, agreement, or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved. The Registration Statement
(including the exhibits and schedules thereto) filed

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with the Commission by the Company may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the Commission:
New York Regional Office, Seven World Trade Center, 13th Floor, New York, New
York 10048; and Chicago Regional Office, Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material may be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. Such documents may also be obtained through the
website maintained by the Commission at http://www.sec.gov.

The Company is not currently subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a
result of the offering of the Company's Class A Common Stock, the Company will
become subject to the informational requirements of the Exchange Act. The
Company will fulfill its obligations with respect to such requirements by filing
periodic reports with the Commission.

The Company intends to furnish holders of the Class A Common Stock offered
hereby with annual reports containing consolidated financial statements audited
by an independent public accounting firm and may provide quarterly reports
containing unaudited financial information for the first three quarters of each
fiscal year.

<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
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PAGE
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<S> <C>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited):

Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 1996 (unaudited)................................................... F-3
Pro Forma Condensed Consolidated Statement of Operations
for the three months ended March 31, 1996 (unaudited).............................. F-4
Pro Forma Condensed Consolidated Statement of Operations
for the year ended December 31, 1995 (unaudited)................................... F-9

HVIDE MARINE INCORPORATED AND SUBSIDIARIES:

Report of Independent Certified Public Accountants................................... F-12
Consolidated Balance Sheets as of December 31, 1994 and 1995 and March 31, 1996
(unaudited).......................................................................... F-13
Consolidated Statements of Operations for the Three Years Ended December 31, 1995 and
for the three months ended March 31, 1995 and 1996 (unaudited)....................... F-14
Consolidated Statements of Stockholders' Equity for the Three Years Ended
December 31, 1995 and for the three months ended March 31, 1996 (unaudited)........ F-15
Consolidated Statements of Cash Flows for the Three Years Ended December 31, 1995 and
for the three months ended March 31, 1995 and 1996 (unaudited)....................... F-16
Notes to Consolidated Financial Statements........................................... F-17

OMI CHEMICAL CARRIER GROUP:

Independent Auditors' Report......................................................... F-32
Combined Balance Sheets as of December 31, 1994 and 1995 and March 31, 1996
(unaudited).......................................................................... F-33
Combined Statements of Operations and Deficit for the Three Years Ended
December 31, 1995 and for the three months ended March 31, 1995 and 1996
(unaudited).......................................................................... F-34
Combined Statements of Cash Flows for the Three Years Ended December 31, 1995 and for
the three months ended March 31, 1995 and 1996 (unaudited)........................... F-35
Notes to Combined Financial Statements............................................... F-36

SEAL FLEET VESSELS:

Independent Auditors' Report......................................................... F-41
Combined Statements of Vessel Operations for the Three Years Ended
December 31, 1995 and for the three months ended March 31, 1995 and 1996
(unaudited).......................................................................... F-42
Notes to Combined Financial Statements............................................... F-43
Independent Auditors' Report......................................................... F-45
Statements of Assets to be Sold as of December 31, 1993, 1994, and 1995 and March 31,
1996 (unaudited)..................................................................... F-46
Statements of Vessel Operations for the Three Years Ended December 31, 1995 and for
the three months ended March 31, 1995 and 1996 (unaudited)......................... F-47
Notes to Financial Statements........................................................ F-48

GULF BOAT MARINE SERVICES, INC. AND E&D BOAT RENTALS, INC.:

Report of Independent Certified Public Accountants................................... F-49
Statement of Assets to be Sold as of September 30, 1994 and 1995 and December 31,
1995 (unaudited)................................................................... F-50
Statements of Vessel Operations for the Two Years Ended September 30, 1995 and for
the three months ended December 31, 1994 and 1995 (unaudited)...................... F-51
Notes to Financial Statements........................................................ F-52
</TABLE>

F-1
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following pro forma condensed consolidated balance sheet at March 31,
1996 gives effect to the pending acquisitions of the OMI Chemical Carriers, the
Seal Fleet Vessels and two additional vessels, the Offering, repayment of
certain indebtedness and the conversion of the Junior Notes into shares of
Common Stock as if the transactions had occurred on March 31, 1996. The pro
forma condensed consolidated statements of operations for the year ended
December 31, 1995 and the three months ended March 31, 1996 give effect to the
foregoing, except for the pending acquisitions of four additional vessels and
the acquisition of certain vessels from GBMS in January 1996 and one vessel in
February 1996, as if the transactions had occurred on January 1, 1995 and 1996,
respectively. The pro forma financial information is presented for illustrative
purposes only and does not purport to project the financial position or results
of operations for any future period or as of any future date. The pro forma
condensed consolidated financial statements should be read in conjunction with
the notes thereto and with the financial statements and the notes thereto of the
Company, the OMI Chemical Carriers, the Seal Fleet Vessels, and the GBMS Vessels
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations," all appearing elsewhere in this Prospectus. See "Business--The
Acquisitions," "Use of Proceeds," and "Capitalization."

F-2
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
MARCH 31, 1996
(UNAUDITED)
PRO FORMA ADJUSTMENTS FOR THE ACQUISITIONS
OF (1)
------------------------------------------ COMPANY PRO
COMPANY OMI OTHER PRO FORMA FORMA
AS CHEMICAL SEAL ACQUISITIONS ADJUSTMENTS OFFERING CONDENSED
REPORTED CARRIERS FLEET OSTC (1) (1) (2) CONSOLIDATED
-------- -------- ------- ------ ------------ ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
ASSETS
Cash and cash equivalents.... $ 6,013 $ $ $2,234 $ $ (37,725) $ 35,648 $ 6,170
Accounts receivable, net..... 14,065 1,639 15,704
Spare parts and supplies..... 3,573 1,803 49 148 5,573
Prepaid expenses and other... 3,578 40 3,618
-------- -------- ------- ------ ----- ----------- -------- ------------
Total Current Assets........ 27,229 1,803 49 4,061 (37,725) 35,648 31,065
Property, net................ 110,742 59,702 25,190 385 9,025 205,044
Goodwill, net................ 8,991 8,991
Deferred costs, net.......... 4,791 3,145 936 11 (961) 7,922
Investment in affiliates..... 840 840
Other........................ 1,427 (883) 544
-------- -------- ------- ------ ----- ----------- -------- ------------
Total Assets................ $154,020 $64,650 $26,175 $4,457 $9,025 $ (37,725) $ 33,804 $254,406
-------- -------- ------- ------ ----- ----------- -------- ------------
-------- -------- ------- ------ ----- ----------- -------- ------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current maturities of debt... $ 12,292 $ 4,815 $ $1,627 $ $ 3,623 $ (3,388) $ 18,969
Accounts Payable............. 7,526 393 7,919
Other........................ 6,963 16 2,437 (1,499) 7,917
-------- -------- ------- ------ ----- ----------- -------- ------------
Total Current Liabilities... 26,781 4,815 16 4,457 3,623 (4,887) 34,805
Long-term debt............... 103,486 29,835 23,752 (38,260) 118,813
Long-term interest payable... 3,157 (3,157)
Deferred income taxes........ 4,351 (1,757) 2,594
Other Liabilities............ 2,447 84 99 2,630
-------- -------- ------- ------ ----- ----------- -------- ------------
Total Liabilities........... 140,222 34,650 100 4,457 27,375 (47,962) 158,842
-------- -------- ------- ------ ----- ----------- -------- ------------
Investment in acquisitions... 30,000 26,075 9,025 (65,100)
Minority partners' equity.... 1,488 1,488
Common stock, paid-in
capital, retained earnings
and treasury stock.......... 12,310 81,766 94,076
-------- -------- ------- ------ ----- ----------- -------- ------------
Total stockholders' equity... 12,310 81,766 94,076
-------- -------- ------- ------ ----- ----------- -------- ------------
Total stockholders' and
minority partners' equity... 13,798 81,766 95,564
-------- -------- ------- ------ ----- ----------- -------- ------------
Total liabilities and
equity....................... $154,020 $64,650 $26,175 $4,457 $9,025 $ (37,725) $ 33,804 $254,406
-------- -------- ------- ------ ----- ----------- -------- ------------
-------- -------- ------- ------ ----- ----------- -------- ------------
</TABLE>

See notes to the pro forma condensed consolidated financial statements.

F-3
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
OMI
COMPANY AS CHEMICAL SEAL ROYAL PRO FORMA
REPORTED CARRIERS FLEET(A) GBMS(B) RUNNER(B) OSTC ELIMINATIONS ADJUSTMENTS
---------- -------- -------- ------- --------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Revenues............. $ 20,211 $6,307 $ 2,355 $ 296 $57 $13,775 $(10,669)(3) $
Operating expenses... 12,216 4,842 1,071 174 29 12,977 (10,669)(3) (830)(4)
Overhead expenses.... 3,613 209 44 279 36(4)
Depreciation and
amortization......... 1,677 1,062 98 14 46 383(5)
--
---------- -------- -------- ------- ------- ------------ -----------
Income (loss) from
operations........... 2,705 194 1,186 64 28 473 411
Net interest......... 2,882 652 11 (660)(6)
Other income
(expense):
Minority interest
and equity in
subsidiaries......... 154
Other............... 23
--
---------- -------- -------- ------- ------- ------------ -----------
Total other income
(expense)......... 177
--
---------- -------- -------- ------- ------- ------------ -----------
Income before income
taxes................ 0 (458) 1,186 64 28 462 1,071
Provision (benefit)
for income taxes.... 35 (160) 8 964(7)
--
---------- -------- -------- ------- ------- ------------ -----------
Net income (loss)
before non-recurring
items directly
attributable to the
transaction.......... $ (35) $ (298) $ 1,186 $ 64 $28 $ 454 $ $ 107
--
--
---------- -------- -------- ------- ------- ------------ -----------
---------- -------- -------- ------- ------- ------------ -----------
Earnings (loss) per
common share......... $ (0.01)
----------
----------
Weighted average
number of common
shares and common
share equivalents
outstanding.......... 2,534,840
----------
----------

<CAPTION>
COMPANY
PRO FORMA
CONDENSED
CONSOLIDATED
------------
<S> <C>

Revenues............. $ 32,332
Operating expenses... 19,810
Overhead expenses.... 4,181
Depreciation and
amortization......... 3,280

------------
Income (loss) from
operations........... 5,061
Net interest......... 2,885
Other income
(expense):
Minority interest
and equity in
subsidiaries......... 154
Other............... 23

------------
Total other income
(expense)......... 177

------------
Income before income
taxes................ 2,353
Provision (benefit)
for income taxes.... 847

------------
Net income (loss)
before non-recurring
items directly
attributable to the
transaction.......... $ 1,506

------------
------------
Earnings (loss) per
common share......... $ 0.14
------------
------------
Weighted average
number of common
shares and common
share equivalents
outstanding.......... 10,904,868
------------
------------
</TABLE>

- ------------

<TABLE>
<C> <S>
(a) Represents the combined statements of vessel operations of assets to be sold for Seal Fleet, Inc.
and the Seal Partners, (Indian Seal Partners, Ltd., Baffin Seal Partners, Ltd., Baltic Seal
Partners, Ltd., Bengal Seal Partners, Ltd., and Ross Seal Partners, Ltd.)
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1996
---------------------------------
SEAL SEAL SEAL
FLEET, INC. PARTNERS FLEET
----------- -------- ------
<S> <C> <C> <C>
Revenues........................................................ $ 841 $1,514 $2,355
Operating expenses.............................................. 418 653 1,071
Depreciation and amortization................................... 98 98
--- -------- ------
Income (loss) from operations................................... $ 325 $ 861 $1,186
--- -------- ------
--- -------- ------
</TABLE>

<TABLE>
<C> <S>
(b) Amounts represent the results of operations for the period January 1, 1996 through the date of
acquisition of January 31, 1996 for GBMS and February 9, 1996 for Royal Runner.
</TABLE>

See notes to the pro forma condensed consolidated financial statement.

F-4
<PAGE>
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) The Company expects the purchase price of the acquisitions to be allocated
to acquired assets and liabilities as follows:

<TABLE>
<CAPTION>
MARCH 31, 1996
----------------------------------------------------------
OTHER
OMI ACQUISITIONS
CHEMICAL SEAL ----------------------------
CARRIERS FLEET OSTC CAROL ST. FRANCIS IMI TOTAL
-------- ------- ------ ----- ----------- ------ --------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents...... $ $ $2,234 $ $ $ $ 2,234
Accounts receivable............ 1,639 1,639
Prepaid expenses and other..... 40 40
Property, net.................. 59,702 25,190 385 825 2,200 6,000 94,302
Spare parts and supplies....... 1,803 49 148 2,000
Deferred costs (net)(a)........ 3,145 936 11 4,092
-------- ------- ------ ----- ----------- ------ --------
$ 64,650 $26,175 $4,457 $ 825 $ 2,200 $6,000 $104,307
-------- ------- ------ ----- ----------- ------ --------
-------- ------- ------ ----- ----------- ------ --------
Current maturities of debt..... $ 4,815 $ $1,627 $ $ $ $ 6,442
Accounts payable............... 393 393
Other current liabilities...... 16 2,437 2,453
Other long-term liabilities.... 84 84
Assumption of long-term debt... 29,835 29,835
Payment of cash................ 15,500 18,075 150 2,200 1,800 37,725
Issuance of debt:
Current........................ 2,554 959 110 3,623
Long-term...................... 11,946 7,041 565 4,200 23,752
-------- ------- ------ ----- ----------- ------ --------
Investment in Acquisitions..... 30,000 26,075 825 2,200 6,000 65,100
-------- ------- ------ ----- ----------- ------ --------
$ 64,650 $26,175 $4,457 $ 825 $ 2,200 $6,000 $104,307
-------- ------- ------ ----- ----------- ------ --------
-------- ------- ------ ----- ----------- ------ --------
</TABLE>

--------------------------

<TABLE>
<C> <S>
(a) Primarily represents an allocation of the purchase price to reflect deferred
drydocking costs in accordance with the Company's policies.
</TABLE>

F-5
<PAGE>
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)

(2) Adjustments to reflect transactions that are expected to use certain of the
proceeds of the Offering, or occur in conjunction with the Offering, as
follows:

<TABLE>
<CAPTION>
OFFERING
OF REPAYMENT
COMMON OF
STOCK LOANS TOTAL
-------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash.................................................... $ 75,940 $(40,292 ) $ 35,648
Deferred costs (net).................................... (961 )(b) (961)
Other assets............................................ (883 )(c) (883)
-------- --------- --------
$ 75,940 $(42,136 ) $ 33,804
-------- --------- --------
-------- --------- --------

Income taxes............................................ $ $ (1,757 ) $ (1,757)
Current maturities of debt.............................. (3,388 ) (3,388)
Other current liabilities............................... (1,499 ) (1,499)
Long-term debt.......................................... (38,260 ) (38,260)
Long-term interest payable.............................. (3,157 ) (3,157)
Other long-term liabilities............................. 99 99
Common stock............................................ 75,940(a) 13,350 (d) 89,290
Retained earnings....................................... (7,524 )(e) (7,524)
-------- --------- --------
$ 75,940 $(42,136 ) $ 33,804
-------- --------- --------
-------- --------- --------
</TABLE>

--------------------------

<TABLE>
<C> <S>
(a) Common stock issued in conjunction with the Offering, less expenses as follows:
</TABLE>

Common stock......................................................... $84,000
Less: Underwriter's discount of 7%................................. (5,880)
Cash portion of investment advisory fee...................... (480)
Legal, accounting, and other costs........................... (1,700)
--------
$75,940
--------
--------

<TABLE>
<C> <S>
(b) Represents the write off of deferred loan costs $(1,086) on the Junior and Senior
Notes to be repaid from the proceeds of the Offering, net of financing costs incurred
on new financing obtained upon the effective date of the Offering ($125).
(c) Represents the reduction of a long-term receivable due from a company owned by the
former Chairman of the Board of the Company in exchange for the reduction of the
principal portion of notes payable to the current and former chairman.
(d) Common stock issued in conjunction with the conversion of Junior Notes and certain
related party notes.
(e) Extraordinary loss on extinguishment of Junior and Senior Notes and certain related
party notes, net of income taxes:

Write-off of deferred loan costs on Junior and Senior Notes................ $(1,086)
Loss on early extinguishment of Junior Notes............................... (7,340)
Loss on early extinguishment of Senior Notes............................... (855)
Less applicable income taxes at statutory rate............................. 1,757
-------
$(7,524)
-------
-------
</TABLE>

F-6
<PAGE>
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)

(3) Elimination of historical revenue and expense associated with OSTC charter
hire of

vessels from Hvide and OMI..................................................
$10,669

(4) Reflects the reduction in insurance expense based upon quotations received
from the Company's insurance underwriters; adjustments to drydocking expense
to reflect the Company's deferral method; elimination of operating lease
expense on acquired OMI vessels that will be financed by Hvide; and
adjustments to reflect incremental corporate overhead and employee salaries
and benefits in accordance with management's plans with respect to the Seal
Fleet Vessels and reduction of historical overhead expenses related to the
integration of the OMI Chemical Carriers and GBMS vessels into the Company's
operations.

<TABLE>
<CAPTION>
OMI
CHEMICAL SEAL
CARRIERS FLEET GBMS TOTAL
-------- ----- ---- -----
<S> <C> <C> <C> <C>
Operating Expenses:
Insurance.............................................. $ (89) $ 9 $(2 ) $ (82)
Drydocking............................................. 7 7
Operating lease expense................................ (755) (755)
-------- ----- ---- -----
$ (837) $ 9 $(2 ) $(830)
-------- ----- ---- -----
-------- ----- ---- -----
Overhead Expenses:
Salaries and benefits.................................. $ 62 $ 112 $(19) $ 155
Other.................................................. (133) 31 (17 ) (119)
-------- ----- ---- -----
$ (71) $ 143 $(36) $ 36
-------- ----- ---- -----
-------- ----- ---- -----
</TABLE>

(5) The adjustment to depreciation and amortization is comprised of:

<TABLE>
<CAPTION>
<S> <C>
Depreciation adjustment to reflect the Company's policies applied to the acquired
cost of the vessels of:
OMI.............................................................................. $104
Seal Fleet....................................................................... 269
GBMS (acquired January 31, 1996)................................................. 4
Royal Runner (acquired February 9, 1996)......................................... 6
----
383
Amortization Adjustment:
Deferred loan costs amortization-Junior Notes.................................. (10)
Deferred loan costs amortization-Senior Notes.................................. (10)
New money fee for the Seal Fleet acquisition................................... 4
Commitment fee................................................................. 10
Revolver fee................................................................... 6
----
0
----
$383
----
----
</TABLE>

F-7
<PAGE>
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)

(6) The adjustment of net interest expense is comprised of:

<TABLE>
<CAPTION>
<S> <C>
Interest expense on additional borrowings pursuant to the OMI acquisition..... $ 159
Interest expense on assumed Title XI debt from OMI............................ 85
Interest expense on OMI Star debt............................................. 141
Interest expense on additional borrowings pursuant to the Seal Fleet
acquisition..................................................................... 165
Interest expense on additional borrowings pursuant to the GBMS acquisition.... 23
Interest expense on Royal Runner debt......................................... 11
Reduction of interest expense due to the repayment of Junior Notes............ (578)
Reduction of interest expense due to the repayment of Senior Notes............ (442)
Reduction of interest expense due to the repayment of Credit Facility......... (92)
Reduction of interest expense due to the repayment of other subordinated
notes........................................................................... (166)
Commitment fee on acquisition line of credit.................................. 34
-----
$(660)
-----
-----
</TABLE>

<TABLE>
<S> <C> <C>
(7) Adjustment for estimated income taxes at combined federal and state statutory
rates for the effect of the pro forma adjustments............................... $ 964
</TABLE>

F-8
<PAGE>

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------------------------------------------------------
OMI
COMPANY AS CHEMICAL SEAL ROYAL PRO FORMA
REPORTED CARRIERS FLEET (A) GBMS RUNNER OSTC ELIMINATIONS ADJUSTMENTS
---------- -------- --------- ------ ------ ------- ------------ -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues.................... $ 70,562 $ 26,099 $ 8,650 $3,287 $651 $57,577 $(43,841)(1) $
Operating expenses.......... 40,664 29,141 4,500 2,209 243 56,064 (43,841)(1) (12,669)(2)
Overhead expenses........... 12,518 848 469 74 1,205 (95)(2)
Depreciation and
amortization................ 6,308 3,355 498 195 145 166 2,063(3)
---------- -------- --------- ------ ------ ------- ------------ -----------
Income (loss) from
operations.................. 11,072 (7,245) 3,652 414 189 142 10,701
Net interest................ 11,460 2,160 95 68 (1,471)(4)
Other income (expense):
Minority interest and
equity in subsidiaries... 137
Other...................... (111) 167 (3)
---------- -------- --------- ------ ------ ------- ------------ -----------
Total other income
(expense)................... 26 167 (3)
---------- -------- --------- ------ ------ ------- ------------ -----------
Income before income
taxes....................... (362) (9,238) 3,652 414 94 71 12,172
Provision (benefit) for
income taxes................ (2) (3,234) 21 5,664(5)
---------- -------- --------- ------ ------ ------- ------------ -----------
Net income (loss) from
continuing operations
before non-recurring items
directly attributable to
the transaction............ $ (360) $ (6,004) $ 3,652 $ 414 $ 94 $ 50 $ $ 6,508
---------- -------- --------- ------ ------ ------- ------------ -----------
---------- -------- --------- ------ ------ ------- ------------ -----------
Earnings (loss) per common
share....................... $ (0.14)
----------
----------
Weighted average number of
common shares and common
share equivalents
outstanding................. 2,534,840
----------
----------

COMPANY
PRO FORMA
CONDENSED
CONSOLIDATED
------------

<S> <C><C>
Revenues.................... $ 122,985
Operating expenses.......... 76,311
Overhead expenses........... 15,019
Depreciation and
amortization................ 12,730
------------
Income (loss) from
operations.................. 18,925
Net interest................ 12,312
Other income (expense):
Minority interest and
equity in subsidiaries... 137
Other...................... 53
------------
Total other income
(expense)................... 190
------------
Income before income
taxes....................... 6,803
Provision (benefit) for
income taxes................ 2,449
------------
Net income (loss) from
continuing operations
before non-recurring items
directly attributable to
the transaction............ $ 4,354
------------
------------
Earnings (loss) per common
share....................... $ 0.40
------------
------------
Weighted average number of
common shares and common
share equivalents
outstanding................. 10,904,868
------------
------------
</TABLE>

- ------------

<TABLE>
<C> <S>
(a) Represents the combined statements of vessel operations of assets to be sold for Seal
Fleet, Inc. and the Seal Partners, (Indian Seal Partners, Ltd., Baffin Seal Partners,
Ltd., Baltic Seal Partners, Ltd., Bengal Seal Partners, Ltd., and Ross Seal Partners,
Ltd.).
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1995
---------------------------------
SEAL SEAL SEAL
FLEET, INC. PARTNERS FLEET
----------- -------- ------
<S> <C> <C> <C>
Revenues............................................... $ 3,267 $5,383 $8,650
Operating expenses..................................... 1,723 2,777 4,500
Depreciation and amortization.......................... 498 498
----- -------- ------
Income (loss) from operations.......................... $ 1,046 $2,606 $3,652
----- -------- ------
----- -------- ------
</TABLE>

See notes to the pro forma condensed consolidated financial statements.

F-9
<PAGE>
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) Elimination of historical revenue and expense associated with OSTC charter
hire of

vessels from Hvide and OMI..................................................
$43,841

(2) Reflects the reduction in insurance expense based upon quotations received
from the Company's insurance underwriters; adjustment to drydocking expense
to reflect the Company's deferral method; elimination of operating lease
expense on acquired OMI vessels that will be owned or capital leased by
Hvide; elimination of a provision for lease penalties on an OMI vessel that
will not be incurred due to the purchase of the vessels; and adjustments to
reflect incremental corporate overhead and employee salaries and benefits in
accordance with management's plans with respect to the OMI Chemical Carriers
and Seal Fleet Vessels and reduction of historical overhead expenses related
to the integration of the GBMS vessels into the Company's operations.

<TABLE>
<CAPTION>
OMI
CHEMICAL SEAL
CARRIERS FLEET GBMS TOTAL
-------- ----- ----- --------
<S> <C> <C> <C> <C>
Operating Expenses:
Insurance......................................... $ (598) $ 8 $ (80) $ (670)
Drydocking........................................ (1,145) (1,145)
Operating lease expense........................... (7,557) (7,557)
Provision for lease penalties..................... (3,297) (3,297)
-------- ----- ----- --------
$(12,597) $ 8 $ (80) $(12,669)
-------- ----- ----- --------
-------- ----- ----- --------
Overhead Expenses:
Salaries and benefits............................. $ 247 $ 447 $(245) $ 449
Other............................................. (544) 124 (124) (544)
-------- ----- ----- --------
$ (297) $ 571 $(369) $ (95)
-------- ----- ----- --------
-------- ----- ----- --------
</TABLE>

(3) The adjustment to depreciation and amortization is comprised of:

<TABLE>
<CAPTION>
<S> <C>
Depreciation adjustment to reflect the Company's policies applied to the
acquired cost of the vessels of:
OMI(a)......................................................................... $1,094
Seal Fleet..................................................................... 1,009
GBMS........................................................................... 23
Royal Runner................................................................... (70)
------
2,056
Amortization Adjustment:
Deferred loan costs amortization--Junior Notes............................... (32)
Deferred loan costs amortization--Senior Notes............................... (52)
New money fee for the Seal Fleet acquisition................................. 17
Commitment fee............................................................... 48
Revolver fee................................................................. 26
------
7
------
$2,063
------
------
</TABLE>

--------------------------

<TABLE>
<C> <S>
(a) Includes depreciation on an OMI vessel historically under an operating lease.
</TABLE>

F-10
<PAGE>
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)

(4) The adjustment of net interest expense is comprised of:

<TABLE>
<CAPTION>
<S> <C>
Interest expense on additional borrowings pursuant to the OMI acquisition.... $ 634
Removal of historical interest income of OMI................................. 1
Interest expense on assumed Title XI debt from OMI(a)........................ 1,003
Interest expense on OMI Star capital lease................................... 520
Interest expense on debt issued pursuant to the Seal Fleet acquisition....... 638
Interest expense on debt issued pursuant to the GBMS acquisition............. 269
Removal of historical interest expense of Royal Runner....................... (95)
Interest expense on Royal Runner debt........................................ 131
Reduction of interest expense due to the repayment of Junior Notes........... (2,199)
Reduction of interest expense due to the repayment of Senior Notes........... (1,775)
Reduction of interest expense due to the repayment of Credit Facility........ (63)
Reduction of interest expense due to the repayment of other subordinated
notes.......................................................................... (665)
Commitment fee on acquisition line of credit................................. 130
-------
$(1,471)
-------
-------
</TABLE>

--------------------------

<TABLE>
<C> <S>
(a) Reflects a full year of interest expense on Title XI debt that was outstanding for a
partial year for OMI.
</TABLE>

<TABLE>
<S> <C> <C>
(5) Adjustment for estimated income taxes at combined federal and state statutory
rates for the effect of the pro forma adjustments.............................. $5,664
</TABLE>

F-11
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
HVIDE MARINE INCORPORATED

We have audited the accompanying consolidated balance sheets of Hvide Marine
Incorporated (f/k/a Hvide Corp.) and subsidiaries as of December 31, 1995 and
1994, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Hvide Marine
Incorporated and subsidiaries at December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.

As explained in Note 1 to the consolidated financial statements, effective
January 1, 1993, the Company changed its method of accounting for drydocking
costs from the accrual method to the deferral method.

ERNST & YOUNG LLP

Miami, Florida
March 28, 1996, except the
first paragraph of Note
14, as to which the date is
May 10, 1996.

F-12
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
1994 1995 1996
(IN THOUSANDS,)EXCEPT SHARE AMOUNTS
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................... $ 6,363 $ 3,050 $ 6,013
Escrow deposit................................................. 500 -- --
Accounts receivable:
Trade, net................................................... 7,862 9,602 10,048
Insurance claims and other................................... 1,292 4,399 4,017
Due from affiliate............................................. 547 101 --
Spare parts and supplies....................................... 3,375 3,417 3,573
Prepaid expenses............................................... 784 960 1,115
Deferred costs (net)........................................... 1,523 2,550 2,463
-------- -------- -----------
Total current assets....................................... 22,246 24,079 27,229
Property:
Construction in progress....................................... 1,646 1,387 1,480
Vessels and improvements....................................... 110,542 122,198 129,518
Less accumulated depreciation................................ (16,040) (20,585) (21,832)
Furniture and equipment........................................ 2,054 2,601 2,633
Less accumulated depreciation................................ (827) (998) (1,057)
-------- -------- -----------
Net property............................................... 97,375 104,603 110,742
Other assets:
Deferred costs (net)........................................... 4,422 4,112 4,791
Due from affiliates............................................ 109 131 150
Investment in affiliates....................................... 574 423 840
Goodwill (net)................................................. 9,586 9,117 8,991
Long-term receivable (net)..................................... 785 831 883
Other.......................................................... 374 387 394
-------- -------- -----------
Total other assets......................................... 15,850 15,001 16,049
-------- -------- -----------
Total..................................................... $135,471 $143,683 $ 154,020
-------- -------- -----------
-------- -------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt........................... $ 4,779 $ 7,708 $ 11,110
Current obligations under capital leases....................... 521 577 1,182
Accounts payable............................................... 4,681 4,905 7,526
Charter hire and other liabilities............................. 4,472 6,574 6,963
-------- -------- -----------
Total current liabilities.................................. 14,453 19,764 26,781
Long-term liabilities:
Long-term debt................................................. 93,700 96,014 94,119
Notes payable to related parties............................... 1,302 1,302 1,302
Obligations under capital leases............................... 3,979 3,450 8,065
Due to charterer............................................... 547 547 547
Deferred income taxes.......................................... 4,319 4,317 4,352
Other.......................................................... 2,268 4,290 5,056
-------- -------- -----------
Total long-term liabilities................................ 106,115 109,920 113,441
-------- -------- -----------
Total liabilities.......................................... 120,568 129,684 140,222
Minority partners' equity in subsidiaries....................... 2,198 1,654 1,488
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $1.00 par value--10,000,000 shares authorized,
no shares issued and outstanding............................. -- -- --
Class A Common Stock--$.001 par value, 100,000,000 shares
authorized, no shares issued and outstanding................. -- -- --
Class B Common Stock--$.001 par value, 5,000,000 shares
authorized, 1,558,210 shares issued and outstanding.......... 1 1 1
Class C Common Stock--$.001 par value, 2,500,000 shares
authorized, 976,630 shares issued and outstanding............ 1 1 1
Additional paid-in capital..................................... 6,341 6,341 6,341
Retained earnings.............................................. 6,362 6,002 5,967
-------- -------- -----------
Total stockholders' equity................................. 12,705 12,345 12,310
-------- -------- -----------
Total minority partners' equity in subsidiaries and
stockholders' equity............................................ 14,903 13,999 13,798
-------- -------- -----------
Total..................................................... $135,471 $143,683 $ 154,020
-------- -------- -----------
-------- -------- -----------
</TABLE>

See notes to consolidated financial statements.

F-13
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31 MARCH 31
1993 1994 1995 1995 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues................................ $ 41,527 $ 49,792 $ 70,562 $ 15,780 $ 20,211
Operating expenses:
Crew payroll and benefits.............. 11,238 13,510 20,132 4,549 5,963
Charter hire and bond guarantee fee.... 4,037 5,013 4,063 1,076 1,086
Repairs and maintenance................ 3,024 3,847 5,347 1,375 1,734
Insurance.............................. 2,365 2,991 4,547 985 1,480
Consumables............................ 1,770 2,237 3,395 626 1,131
Other.................................. 1,598 2,275 3,180 654 822
---------- ---------- ---------- ---------- ----------
Total operating expenses........... 24,032 29,873 40,664 9,265 12,216
Selling, general and administrative
expenses:
Salaries and benefits.................. 3,202 4,649 6,856 1,481 1,894
Office expenses........................ 633 819 1,068 255 300
Professional fees...................... 1,268 2,645 2,137 426 768
Other.................................. 1,073 1,468 2,457 556 651
---------- ---------- ---------- ---------- ----------
Total overhead expenses............ 6,176 9,581 12,518 2,718 3,613
Depreciation and amortization........... 4,735 4,500 6,308 1,479 1,677
---------- ---------- ---------- ---------- ----------
Income from operations.................. 6,584 5,838 11,072 2,318 2,705
Interest:
Interest expense....................... 3,606 5,614 11,748 2,791 2,948
Interest income........................ (194) (312) (288) (75) (66)
---------- ---------- ---------- ---------- ----------
Net interest....................... 3,412 5,302 11,460 2,716 2,882
Other income (expense):
Minority interest and equity in
earnings of subsidiaries............. (960) (115) 137 27 154
Other.................................. 1,479 126 (111) (238) 23
---------- ---------- ---------- ---------- ----------
Total other income (expense)....... 519 11 26 (211) 177
---------- ---------- ---------- ---------- ----------
Income (loss) before provision for
(benefit from) income taxes and
cumulative effect of a change in
accounting principle.................... 3,691 547 (362) (609) --
Provision for (benefit from) income
taxes................................... 1,873 189 (2) -- 35
---------- ---------- ---------- ---------- ----------
Income (loss) before cumulative effect
of a change in accounting principle.... 1,818 358 (360) (609) (35)
---------- ---------- ---------- ---------- ----------
Cumulative effect (to January 1, 1993)
of change in drydocking method......... 1,491 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income (loss)....................... $ 3,309 $ 358 $ (360) $ (609) $ (35)
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Net income (loss) applicable to common
shares.................................. $ 1,615 $ 136 $ (360) $ (609) $ (35)
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Earnings (loss) per common share:
Income (loss) applicable to common
shares before cumulative effect of a
change in accounting principle....... $ 0.26 $ 0.03 $ (0.14) $ (0.24) $ (0.01)
Cumulative effect (to January 1, 1993)
of change in dry-docking method........ 0.24 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income (loss) applicable to common
shares.................................. $ 0.50 $ 0.03 $ (0.14) $ (0.24) $ (0.01)
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Weighted average number of common shares
and common share equivalents
outstanding............................. 6,267,558 5,302,060 2,534,840 2,534,840 2,534,840
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

See notes to consolidated financial statements.

F-14
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
11% 5% CLASS A CLASS B CLASS C
CLASS A CLASS B COMMON STOCK COMMON STOCK COMMON STOCK ADDITIONAL
PREFERRED PREFERRED -------------------- ----------------- --------------- PAID-IN RETAINED
STOCK STOCK SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS
--------- --------- ------------ ------ --------- ------ ------- ------ ---------- --------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1993, as previously
reported.................. $ 2,669 $ 3,266 16,302,946 $ 19 -- $-- -- $-- $1,008 $ 9,381
Effect of recapitalization
(see Note 1)............. -- -- (16,302,946) (19) 1,105,692 1 663,415 1 17 (5,935)
--------- --------- ------------ ------ --------- ------ ------- ------ ----- --------
Balance at January 1,
1993, as restated........ 2,669 3,266 -- -- 1,105,692 1 663,415 1 1,025 3,446
Net income................ -- -- -- -- -- -- -- 3,309
Preferred stock cash
dividends................. -- -- -- -- -- -- -- (366)
--------- --------- ------------ ------ --------- ------ ------- ------ ----- --------
Balance at December 31,
1993...................... 2,669 3,266 -- -- 1,105,692 1 663,415 1 1,025 6,389
Net income................ -- -- -- -- -- -- -- -- -- 358
Common stock issued, net
of issuance costs........ -- -- -- -- 452,518 -- 313,215 -- 8,640 --
Redemption of preferred
stock..................... (2,669) (3,266) -- -- -- -- -- -- (1,350) --
Acquisition of limited
partnership interests.... -- -- -- -- -- -- -- -- (1,974) --
Preferred stock cash
dividends................. -- -- -- -- -- -- -- (385)
--------- --------- ------------ ------ --------- ------ ------- ------ ----- --------
Balance at December 31,
1994...................... -- -- -- -- 1,558,210 1 976,630 1 6,341 6,362
Net loss.................. -- -- -- -- -- -- -- -- -- (360)
--------- --------- ------------ ------ --------- ------ ------- ------ ----- --------
Balance at December 31,
1995...................... -- -- -- -- 1,558,210 1 976,630 1 6,341 6,002
Net loss.................. -- -- -- -- -- -- -- -- -- (35)
--------- --------- ------------ ------ --------- ------ ------- ------ ----- --------
Balance at March 31, 1996
(unaudited)............... $ -- $ -- $ -- $-- 1,558,210 $ 1 976,630 $ 1 $6,341 $ 5,967
--------- --------- ------------ ------ --------- ------ ------- ------ ----- --------
--------- --------- ------------ ------ --------- ------ ------- ------ ----- --------

TREASURY
STOCK TOTAL
-------- -------

<S> <C> <C>
Balance at January 1,
1993, as previously
reported.................. $ (5,935) $10,408
Effect of recapitalization
(see Note 1)............. 5,935 --
-------- -------
Balance at January 1,
1993, as restated........ -- 10,408
Net income................ -- 3,309
Preferred stock cash
dividends................. -- (366)
-------- -------
Balance at December 31,
1993...................... -- 13,351
Net income................ -- 358
Common stock issued, net
of issuance costs........ -- 8,640
Redemption of preferred
stock..................... -- (7,285)
Acquisition of limited
partnership interests.... -- (1,974)
Preferred stock cash
dividends................. -- (385)
-------- -------
Balance at December 31,
1994...................... -- 12,705
Net loss.................. -- (360)
-------- -------
Balance at December 31,
1995...................... -- 12,345
Net loss.................. -- (35)
-------- -------
Balance at March 31, 1996
(unaudited)............... $ -- $12,310
-------- -------
-------- -------
</TABLE>

See notes to consolidated financial statements.

F-15
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
1993 1994 1995 1995 1996
(UNAUDITED)
(IN THOUSANDS)
OPERATING ACTIVITIES:
<S> <C> <C> <C> <C> <C>
Income (loss) before cumulative effect of a change in
accounting principle................................. $ 1,818 $ 358 $ (360) $ (609) $ (35)
Adjustments to reconcile income (loss) before
cumulative effect of a change in accounting principle
to net cash provided by operating activities:
Cumulative effect of change in drydocking method..... 1,491 -- -- -- --
Depreciation and amortization........................ 4,735 4,500 6,308 1,479 1,677
Provision for bad debts.............................. -- -- 114 -- 31
Gain on disposals of property........................ -- -- (73) -- --
Amortization of discount on long-term debt........... -- 52 201 48 54
Provision for (benefit from) deferred taxes.......... 1,402 189 (2) -- 35
Minority partners' equity in earnings (losses) of
subsidiaries, net....................................... 1,179 184 (625) (181) (166)
Undistributed (earnings) losses of affiliates, net... (219) (69) 488 154 12
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable................................ (790) (4,574) (5,056) (258) (95)
Due from affiliates................................ (630) (235) (394) (139) 82
Other assets....................................... (819) (1,622) (1,317) (637) (1,207)
Accounts payable and other liabilities............. (1,211) 4,075 4,664 3,347 3,776
------- -------- ------- ------- -------
Net cash provided by operating activities............... 6,956 2,858 3,948 3,204 4,164
INVESTING ACTIVITIES:
Purchase of property................................... (1,917) (5,672) (6,312) (1,044) (2,035)
Proceeds from disposals of property.................... -- -- 690 -- --
Capital contribution to affiliates..................... (330) -- -- -- (429)
Deposit of funds in escrow........................... -- (500) -- -- --
Acquisitions, net of $500 escrow deposit utilized in
1995 and net of cash acquired of $106 in 1994........ -- (33,643) (2,444) (2,375) --
------- -------- ------- ------- -------
Net cash used in investing activities................... (2,247) (39,815) (8,066) (3,419) (2,464)
FINANCING ACTIVITIES:
Proceeds from line of credit borrowings................ -- -- 7,500 -- 3,000
Proceeds from Senior Note.............................. -- 23,072 -- -- --
Proceeds from Junior Note.............................. -- 17,508 -- -- --
Proceeds from term loan................................ -- 50,000 -- -- 2,197
Proceeds from stock issuance........................... -- 9,420 -- -- --
Principal payments of long-term debt................... (5,738) (51,700) (5,458) (1,332) (3,744)
Payment of debt and other financing costs.............. -- (3,478) (727) -- --
Payment of stock issuance costs........................ -- (780) -- -- --
Payment of obligations under capital leases............ -- (34) (510) (103) (190)
Payment of dividends................................... (366) (385) -- -- --
Distribution of minority partners' equity.............. (54) -- -- -- --
Redemption of preferred stock.......................... -- (2,374) -- -- --
------- -------- ------- ------- -------
Net cash (used in) provided by financing activities..... (6,158) 41,249 805 (1,435) 1,263
------- -------- ------- ------- -------
(Decrease) increase in cash and cash equivalents........ (1,449) 4,292 (3,313) (1,650) 2,963
Cash and cash equivalents at beginning of period........ 3,520 2,071 6,363 6,363 3,050
------- -------- ------- ------- -------
Cash and cash equivalents at end of period.............. $ 2,071 $ 6,363 $ 3,050 $ 4,713 $ 6,013
------- -------- ------- ------- -------
------- -------- ------- ------- -------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Net assets recorded in connection with dissolution of
affiliate............................................... $ -- $ -- $ 341 $ -- $ --
------- -------- ------- ------- -------
------- -------- ------- ------- -------
Notes payable and notes payable to related parties
issued for the acquisition of vessels (see Note 3)..... $ -- $ 2,149 $ 3,000 $ 3,000 $ --
------- -------- ------- ------- -------
------- -------- ------- ------- -------
Capital leases assumed for the acquisition of vessels
(see Note 4)........................................... $ -- $ 4,534 $ -- $ -- $ 5,410
------- -------- ------- ------- -------
------- -------- ------- ------- -------
Note payable issued for the acquisition of minority
interest (see Note 3).................................. $ -- $ 3,039 $ -- $ -- $ --
------- -------- ------- ------- -------
------- -------- ------- ------- -------
Note payable issued and other liabilities incurred in
conjunction with the redemption of preferred stock
(see Note 9)........................................... $ -- $ 4,911 $ -- $ -- $ --
------- -------- ------- ------- -------
------- -------- ------- ------- -------
Mortgage liabilities assumed for the acquisition of
vessels
(see Note 3)........................................... $ -- $ 279 $ -- $ -- $ --
------- -------- ------- ------- -------
------- -------- ------- ------- -------
</TABLE>

See notes to consolidated financial statements.

F-16
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1995
(INFORMATION PERTAINING TO THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS
UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Organization and Basis of Consolidation--Hvide Marine Incorporated ("HMI,"
the "Company," and the "Successor") (f/k/a Hvide Corp.) was incorporated in the
state of Florida on September 28, 1994 as the holding company for the former
Hvide Marine Incorporated (f/k/a Hvide Shipping, Incorporated) and its
majority-owned subsidiaries (the "Predecessor Company"). On September 30, 1994,
100% of the Common Stock of the Predecessor Company was exchanged for common
stock of HMI and accounted for in a manner similar to a pooling-of-interests.
Accordingly, the accompanying consolidated financial statements include the
combined successor/predecessor companies for all periods subsequent to September
30, 1994 and the Predecessor Company for all periods prior to September 30,
1994. All share and per share amounts have been adjusted to give retroactive
effect to the capital structure of HMI. All material intercompany transactions
and balances have been eliminated in the consolidated financial statements.
Investments in limited partnerships and less-than-majority-owned subsidiaries
are accounted for on the equity method.

The accompanying unaudited Consolidated Financial Statements as of March 31,
1995 and 1996 have been prepared in accordance with generally accepted
accounting principles for interim financial information. In the opinion of
management, all adjustments considered necessary to present fairly the
consolidated financial position, results of operations and cash flows have been
included in the accompanying unaudited consolidated interim financial
statements.

Operations--The principal operations of the Company consist of vessel time
charters, vessel operating agreements and harbor towing. Through its vessel time
charters and operating agreements, the Company serves the energy and chemical
industries in the U.S. domestic trade. The Company's harbor towing operations
principally serve the passenger cruise ship, energy, and chemical industries and
are concentrated in ports located in the southeastern United States.

Revenues--Revenues from time charters are earned and recognized on a daily
basis. Time charter revenues are adjusted periodically based on changes in
specified price indices and market conditions.

Cash and Cash Equivalents--The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents.

Insurance Claims Receivable--Insurance claims receivable represent costs
incurred in connection with insurable incidents for which the Company expects to
be reimbursed by the insurance carrier(s), subject to applicable deductibles.
Deductible amounts related to covered incidents are expensed in the period of
occurrence of the incident.

Spare Parts and Supplies--Inventories of spare parts and supplies are stated
at the lower of cost, determined on a basis that approximates the last-in,
first-out method, or market.

Prepaid Expenses--Prepaid expenses primarily include prepaid vessel
insurance.

Property--Vessels, improvements and equipment are stated at cost less
accumulated depreciation. Major renewals and improvements are capitalized and
replacements, maintenance and repairs which do not improve or extend the lives
of the assets are expensed. Depreciation is computed on the straight-line method
over the estimated useful lives of the assets. The estimated useful lives of
vessels and improvements other than tankers are 15 to 40 years and the estimated
useful lives of furniture and equipment are 3 to 10 years. Tankers and related
improvements are depreciated over estimated useful lives, as determined by the
Oil Pollution Act of 1990 and other factors, ranging from 4 to 24 years.

F-17
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES--(CONTINUED)
Vessels under capital leases are amortized over the estimated useful lives
of the vessels. Included in vessels and improvements at December 31, 1994 and
1995 and at March 31, 1996 are vessels under capital leases of approximately
$5,003,000, $5,229,000 and $10,660,000, net of accumulated amortization of
approximately $37,000, $149,000 and $301,000, respectively.

For the years ended December 31, 1993, 1994 and 1995, and the three months
ended March 31, 1995 and 1996, depreciation and amortization of vessels,
improvements and equipment was approximately $3,020,000, $3,397,000 and
$4,770,000, and $1,127,000 and $1,306,000, respectively.

Accounting for Drydocking Expenses--Approximately every 30 months, certain
Company vessels are drydocked for major repairs and maintenance which cannot be
performed while the vessels are operating.

Through fiscal 1992, the Company provided currently for the estimated future
costs of drydockings. Effective January 1, 1993, the Company changed its method
of accounting for drydocking costs from the accrual method to the deferral
method. Under the deferral method, the Company capitalizes its drydocking costs
and amortizes them over the period through the next drydocking. Management
believes the deferral method better matches costs with revenues. Also, the
deferral method minimizes any significant changes in estimates associated with
the accrual method. The cumulative effect of this accounting change for years
prior to 1993, which is shown separately in the consolidated statement of
operations for 1993, resulted in a benefit of $1,491,000, or $0.24 per common
share.

The following summary reflects net income and net income per common share
for the year ended December 31, 1993 on an historical basis and as if the change
in accounting principle had been retroactively applied:

<TABLE>
<CAPTION>
NET INCOME
PER COMMON
SHARE (PRIMARY
NET INCOME AND FULLY DILUTED)
---------- ------------------
<S> <C> <C>
As reported..................................... $3,309,000 $ 0.50
Pro Forma....................................... 1,818,000 0.26
</TABLE>

At December 31, 1994 and 1995 and at March 31, 1996, deferred costs include
unamortized drydocking of approximately $1,938,000, $2,534,000 and $2,188,000,
respectively.

Deferred Costs--Deferred costs primarily represent drydocking and financing
costs. Deferred financing costs are amortized over the term of the related
borrowings.

Goodwill--Goodwill represents the excess of the purchase price over the fair
value of certain assets acquired and is amortized on the straight-line basis
over 20 to 40 years. The carrying value of goodwill is reviewed if facts and
circumstances suggest that it may be impaired. If this review indicates that
goodwill will not be recoverable, as determined based on the estimated
undiscounted cash flows of the assets acquired over the remaining amortization
period, the carrying value will be adjusted accordingly. At December 31, 1994
and 1995 and at March 31, 1996, accumulated amortization of goodwill was
approximately $1,184,000, $1,689,000 and $1,815,000, respectively.

Income Taxes--HMI files a consolidated tax return with all corporate
subsidiaries other than Seabulk Ocean Systems Holdings, Inc. and Seabulk Ocean
Systems Corporation, which file a separate consolidated income tax return. Each
partnership subsidiary files a separate partnership tax return.

F-18
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES--(CONTINUED)
The Financial Accounting Standards Board ("FASB") issued Statement No. 109,
"Accounting for Income Taxes," which requires the liability method of accounting
for income taxes. Under the liability method, deferred income tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities, and are measured using the enacted tax
rates and laws in effect when the differences are expected to reverse. Under
FASB Statement No. 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. The Company adopted FASB Statement No. 109 in 1993 and applied
its provisions retroactively.

Prospective Accounting Change--In March 1995, the FASB issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement No. 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company adopted Statement No. 121 in the first quarter of 1996 and the effect of
adoption was not material.

Earnings (Loss) per Common Share--Earnings (loss) per common share is
calculated based on the weighted average number of common shares and dilutive
common stock equivalents outstanding during the period. Common stock equivalents
result from convertible preferred stock outstanding in 1993 and 1994. Weighted
average shares outstanding were increased by 4,498,451 and 3,339,946 shares in
1993 and 1994, respectively, to reflect the if-converted effect of convertible
Class B Preferred Stock. Net income (loss) applicable to common shares used in
the calculation of earnings (loss) per common share has been adjusted to give
effect to cash dividends of $203,000 and $222,000 paid on Class A Preferred
Stock during 1993 and 1994, respectively. Shares of common stock contingently
issuable pursuant to the convertible Junior Subordinated Note (see Note 3) had
no effect on earnings per share data for 1994 or 1995, or for the three months
ended March 31, 1995 or 1996, as the effect is antidilutive.

Concentrations of Credit Risk--Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of cash
and cash equivalents in banks, trade accounts receivable and insurance claims
receivable. The credit risk associated with cash and cash equivalents in banks
is considered low due to the credit quality of the financial institutions. The
Company performs ongoing credit evaluations of its trade customers and generally
does not require collateral. The credit risk associated with insurance claims
receivable is considered low due to the credit quality and funded status of the
insurance pools that the Company participates in.

Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Reclassifications--Certain amounts from the prior years' consolidated
financial statements have been reclassified to conform with the current year's
presentation.

2. CAPITAL CONSTRUCTION FUNDS

Pursuant to a Dual Use Agreement between Seabulk Tankers, Ltd. ("STL") and
the United States of America ("U.S."), the Capital Construction Funds maintained
by STL is collateral to the U.S., which amounts were $33,000 and $36,000 at
December 31, 1994 and 1995, respectively.

F-19
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. DEBT

Long-term debt as of December 31, 1994 and 1995, and as of March 31, 1996,
consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31, 1996
1994 1995 (UNAUDITED)
<S> <C> <C> <C>
Borrowings outstanding under line of
credit................................... $ -- $ 7,500 $ 10,500
Term loan................................ 50,000 46,000 47,000
Senior note.............................. 23,096 23,200 23,227
Junior note.............................. 17,536 17,633 17,660
Notes payable............................ 7,447 9,389 6,842
Mortgage note............................ 276 -- --
Other.................................... 124 -- --
-------- ------- --------------
98,479 103,722 105,229
Less: Current maturities................. (4,779) (7,708) (11,110)
-------- ------- --------------
$ 93,700 $96,014 $ 94,119
-------- ------- --------------
-------- ------- --------------
</TABLE>

On September 28, 1994, the Company entered into an agreement, as amended on
May 15, 1995 and March 26, 1996, for a credit facility (the "Credit Facility")
with its principal banks, under which the Company received aggregate financing
of $63,100,000.

The Credit Facility provides for a working capital credit line of $7,500,000
through January 15, 2001 (the "Original Line") and a stand-by letter of credit
(the "Letter of Credit") of $5,600,000. Borrowings under the Original Line bear
interest at the prime rate or LIBOR, at the option of the Company, plus an
applicable margin based upon the Company's compliance with certain financial
covenants (approximately 8.9% and 8.2% at December 31, 1995 and March 31, 1996,
respectively), and are subject to an annual commitment fee of 0.50% of the
unused portion of the credit line. Borrowings outstanding under the Original
Line totaled $7,500,000 at December 31, 1995 and March 31, 1996, of which
$2,500,000 is currently due and $5,000,000 is due on the ultimate maturity date
of January 15, 2001. The Letter of Credit is collateral for a surety bond to
fund any final award relating to the shipyard's claims discussed in Note 5.
Additionally, the Credit Facility provides for a letter of credit in an amount
equal to the greater of amounts available to be drawn under the Original Line or
$4,000,000. Amounts drawn under either letter of credit are due on demand or the
ultimate maturity date of January 15, 2001. There were no amounts outstanding
under the letters of credit at December 31, 1995 or March 31, 1996.

The Credit Facility provided for a term loan (the "Term Loan") in the
original principal amount of $50,000,000. The Term Loan is payable in quarterly
principal and interest payments beginning January 15, 1995. Borrowings under the
Term Loan bear interest at the prime rate or LIBOR, at the option of the
Company, plus an applicable margin based upon the Company's compliance with
certain financial covenants. At December 31, 1995 and March 31, 1996, the Term
Loan was accruing interest at LIBOR +3.0% (approximately 8.9% and 8.3%,
respectively).

The Credit Facility provides for an additional $7,500,000 working capital
line of credit due the earlier of the successful completion of an initial public
offering of the Company's common stock (the "Offering"), or March 15, 1997. At
December 31, 1995 and March 31, 1996, $0 and $3,000,000 was outstanding under
this line. Additionally, the Credit Facility provides that the amount available
under the Term Loan will increase to $54,500,000 and will provide a $12,500,000
vessel acquisition line of

F-20
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. DEBT--(CONTINUED)
credit ("Vessel Acquisition Line of Credit") upon the successful completion of
the Offering. The Credit Facility was amended on June 21, 1996 as described in
Note 14.

The collateral for the Company's debt includes all Company-owned vessels,
outstanding common stock, the partnership interests in STL and Seabulk
Transmarine Partnership, Ltd., spare parts, fuel and supplies, and eligible
accounts receivable.

On September 30, 1994, and as amended on May 24, 1995, the Company issued a
$25,000,000 senior subordinated note (the "Senior Note"). The Senior Note bears
interest at 12%, payable semi-annually on March 31 and September 30. The
principal portion of the Senior Note is payable in equal annual installments on
September 30, 2003 and 2004. The Company received proceeds of approximately
$23,072,000, net of a discount of $1,928,000 ($1,904,000, $1,800,000 and
$1,773,000 at December 31, 1994 and 1995 and March 31, 1996, respectively) which
is being amortized as interest expense over the term of the Senior Note.
Repayment of the Senior Note is subordinated to the claims of the Company's
principal banks for amounts outstanding under the Credit Facility.

The terms of the Credit Facility and Senior Note prohibit the Company or any
of its wholly owned subsidiaries from paying dividends on any class of common
stock and restrict, among other things, the Company's ability to enter into new
commitments or borrowings over specified amounts and dispose of assets outside
the ordinary course of business. In addition, the Company is required to
maintain a minimum level of tangible net worth, as defined, and to prepay
amounts outstanding under the Credit Facility to the extent of 50% of excess
cash flow, as defined.

On September 30, 1994, HMI issued a $25,000,000 junior subordinated note
(the "Junior Note"). The Junior Note bears interest at 8%, compounded quarterly.
The principal sum and all accrued and unpaid interest ($2,607,000 and $3,157,000
at December 31, 1995 and March 31, 1996, respectively) is payable on the earlier
of the Offering or September 30, 2014. The Company received proceeds of
approximately $17,508,000, net of a discount of $7,492,000 ($7,464,000,
$7,367,000 and $7,340,000 at December 31, 1994 and 1995 and March 31, 1996,
respectively) which is being amortized as interest expense over the term of the
Junior Note. Repayment of the Junior Note is subordinated to the claims of the
Company's principal banks for amounts outstanding under the Credit Facility and
to the claims of the note holders for amounts outstanding under the Senior Note.
Commencing on September 30, 1998, the Junior Note, or any portion of the
principal amount thereof, is convertible, at the option of the holders, into a
fixed number of shares of the Company's common stock.

In connection with the acquisition of the minority interest in STL in 1994
(see Note 6), the Company issued a note payable of approximately $3,039,000.
Interest on the note is payable quarterly at Prime +2%, limited to 10% (10% at
December 31, 1995 and March 31, 1996), and the principal portion of the note is
due in equal annual installments through 1999 ($2,431,000 outstanding at
December 31, 1995 and March 31, 1996). Repayment of this note is subordinated to
the claims of the Company's principal banks for amounts outstanding under the
Credit Facility.

In connection with the acquisition of the outstanding limited partnership
interests in Hvide Chartering, Ltd. ("HCL") and Hvide Offshore Services, Ltd.
("HOS") in 1994 (see Note 6), the Company issued notes payable of approximately
$2,149,000. Approximately $1,302,000 of these notes were issued to certain
officers and employees of the Company and are recorded as notes payable to
related parties in the accompanying consolidated balance sheets. Interest on the
notes is payable quarterly at 12% and the notes are due in 2004.

F-21
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. DEBT--(CONTINUED)
In connection with redemption of the outstanding preferred stock of the
Predecessor Company in 1994 (see Note 9), the Company issued notes payable
totaling approximately $3,561,000 to the former stockholder. Interest on the
notes is payable quarterly at the greater of 12% or Prime +3% (12% at December
31, 1995 and March 31, 1996). The principal portion of the notes is due in the
year 2000. Repayment of these notes is subordinated to the claims of the
Company's principal banks for amounts outstanding under the Credit Facility.

In connection with the acquisition of seven crew vessels in 1995 (see Note
11), the Company issued a $3,000,000 note payable. The note bears interest at 8%
and provides for quarterly payments of principal and interest through the year
2000 ($2,550,000 outstanding at December 31, 1995). The note is secured by first
preferred mortgages on four of the acquired vessels. The note payable was repaid
in February 1996.

The aggregate annual future payments due on debt and notes payable at
December 31, 1995 are as follows (in thousands):

1996............................................................ $ 7,708
1997............................................................ 7,208
1998............................................................ 9,208
1999............................................................ 9,208
2000............................................................ 11,710
Thereafter...................................................... 58,680
--------
$103,722
--------
--------

In addition to the letter of credit available pursuant to the Credit
Facility, the Company has an available letter of credit of $7,000,000 for future
charter hire payments relating to the Seabulk Magnachem lease financing.

The Company made interest payments of approximately $3,593,000, $3,062,000
and $8,952,000 in 1993, 1994 and 1995, respectively and approximately $1,861,000
and $2,530,000 for the three months ended March 31, 1995 and 1996, respectively.

F-22
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

4. CAPITAL LEASES

The Company owns certain vessels under leases that are classified as capital
leases. The following is a schedule of future minimum lease payments under
capital leases together with the present value of the
net minimum lease payments as of December 31, 1995 (in thousands):

1996........................................................ $ 875
1997........................................................ 875
1998........................................................ 875
1999........................................................ 863
2000........................................................ 863
Thereafter.................................................. 683
------------
Total minimum lease payments................................ 5,034
Less amount representing interest........................... (1,007)
------------
Present value of minimum lease payments (including current
portion of $577).......................................... $ 4,027
------------
------------

5. COMMITMENTS AND CONTINGENCIES

A significant portion of the Company's operations consists of charters of
ocean-going vessels. The Seabulk Challenger and Seabulk Magnachem are bareboat
chartered for periods extending through the years 1999 and 2002, respectively.
Charter hire expense on these vessels was approximately $3,400,000, $3,100,000
and $3,153,000, and $773,000 and $790,000, for the years ended December 31,
1993, 1994 and 1995, and the three months ended March 31, 1995 and 1996,
respectively. The Company's tractor tug Broward is bareboat chartered, through
the year 2010. Charter hire expense on this vessel was approximately $217,000
and $163,000 for the year ended December 31, 1995 and the three months ended
March 31, 1996, respectively. The aggregate annual future payments due under
these charter agreements at December 31, 1995 for the next five years are as
follows (in thousands):

1996............................................................. $ 3,795
1997............................................................. 3,842
1998............................................................. 3,893
1999............................................................. 3,949
2000............................................................. 2,592
-------
$18,071
-------
-------

F-23
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. COMMITMENTS AND CONTINGENCIES--(CONTINUED)
The Company is party to a lease agreement, as amended, of its office
facilities with a remaining period of 14 years. The estimated remaining
commitment under this lease at December 31, 1995 was $7,450,000 with
approximately $532,000 payable in each of the next five years.

Rent expense for the years ended December 31, 1993, 1994 and 1995, and for
the three months ended March 31, 1995 and 1996, was approximately $341,000,
$467,000 and $666,000 and $178,000 and $193,000, respectively.

In 1990, the Company withheld approximately $2,400,000 from a shipyard
relating to delays and other problems encountered in the construction of a
vessel. In 1993, the shipyard filed a claim to recover approximately $8,500,000
for costs allegedly due the shipyard, and the Company asserted a counterclaim
for approximately $5,600,000 against the shipyard. In addition, the shipyard is
seeking $10,000,000 of punitive damages. Management believes the shipyard's
claim amounts are unsubstantiated and that recoveries upon its counterclaim,
together with insurance coverage, will exceed amounts, if any, which may be
awarded to the shipyard for its claim. Management believes that the additional
costs it incurred to complete the construction of the vessel exceeded the
amounts withheld (settlement of construction costs, if any, would generally be
capitalized and depreciated over future periods); however, the Company is unable
to predict the final outcome of this matter.

In November 1989, STL formed an 88%-owned subsidiary, Seabulk Offshore, Ltd.
("SOL"), which acquired eight offshore supply vessels for approximately
$13,510,000. In December 1990, STL and Hvide Marine Transport, Incorporated (a
wholly-owned subsidiary of HMI) purchased the remaining 12% interest in SOL from
the limited partner ("U.S. Offshore") for $825,000. Additionally, SOL agreed to
pay U.S. Offshore an amount equal to 5% of gross revenues from the operation of
the vessels for a period not to exceed a maximum of 40 months (December 1, 1990
through March 31, 1994) and in a total amount not to exceed $1,300,000,
whichever occurred first. Approximately $769,000 has been paid to U.S. Offshore
under this agreement. U.S. Offshore has filed a claim against SOL related to the
amount due under the agreement. SOL is vigorously defending this claim and
believes that it will ultimately prevail; however, the Company is unable to
predict the final outcome of this matter.

On August 6, 1992, a wholly-owned subsidiary, Seabulk Transmarine II, Inc.
acquired a 49% interest in a joint venture which charters two offshore supply
vessels from SOL for a period of six years. At the end of the charter period,
the joint venture shall have the option to purchase each of the vessels at an
agreed-upon purchase price of $300,000.

On September 30, 1994, the Company acquired Sun State Marine Services, Inc.
("SSMS"). The acquisition agreement provides the sellers contingent payments for
a period of five years from the date of the agreement. The contingent amount
payable each year is 30% of the amount by which net income pertaining to the
acquired operations for that year, as defined, exceeds $1,800,000. The aggregate
total of the additional consideration is limited to $3,000,000 over the term of
the agreement. Such contingent payments, when incurred, will be recorded as
additional cost of the acquisition. During the year ended December 31, 1995,
contingent payments made related to 1994 amounted to approximately $36,000.
There were no contingent amounts due related to the acquired operations for the
year ended December 31, 1995.

The Company has guaranteed 50% of the outstanding line of credit borrowings
of its unconsolidated 50%-owned affiliate Ocean Specialty Tankers Corporation
("OSTC"), up to a maximum of

F-24
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. COMMITMENTS AND CONTINGENCIES--(CONTINUED)
$2,000,000. Total borrowings outstanding under the line of credit subject to the
guarantee were approximately $1,600,000 at December 31, 1995.

At December 31, 1995, the Company was party to an agreement, as amended on
January 31, 1996 and March 28, 1996, for the purchase of the remaining 50% of
the outstanding common stock of OSTC, pursuant to which the Company is to
acquire three chemical tankers. The agreement, which is subject to the
successful completion of the Offering, provides for an aggregate purchase price
of approximately $64,650,000, consisting of approximately $30,000,000 in cash
and the assumption of approximately $34,650,000 in mortgage obligations related
to two of the vessels to be acquired. The agreement calls for payments to the
seller totaling $300,000 in the event that the transaction does not close by
August 15, 1996.

At December 31, 1995, Hvide Partners, L.P. ("HPLP"), an affiliated entity in
which the Company participates as the sole general partner, was party, through
its five 75%-owned limited liability companies Hvide Van Ommeren Tankers I-V LLC
("HVOT I-V"), to contracts for the construction of five double-hulled tankers.
Pursuant to its general and indirect limited partnership interests in HPLP, the
Company is required to make capital contributions to HPLP in 1996 totaling
approximately $1,000,000. The Company was also party to an agreement at December
31, 1995 to provide technical services and support related to the operations of
HVOT I-V. Pursuant to this agreement and commencing in 1997, the Company is to
be paid an annual fee of $295,000, subject to future escalation equal to
increases, if any, in the CPI.

6. RELATED PARTY TRANSACTIONS

In 1994, the Company acquired outstanding limited partnership interests of
HCL, a limited partnership in which the Company owned a 33 1/3% interest as
general partner, from certain officers and employees of the Company for cash and
notes payable of approximately $668,000 and $1,089,000, respectively.

In 1994, the Company acquired the outstanding limited partnership interests
of HOS from certain officers and employees of the Company for cash and notes
payable of approximately $607,000 and $1,060,000, respectively. Additionally,
the company assumed HOS's outstanding capital lease obligations (see Note 4) and
certain other liabilities.

The purchase price of the vessels and other net assets acquired in the
acquisition of the limited partnership interests of HCL and HOS was
approximately $1,974,000 in excess of their historical net book value.
Accordingly, such amounts were deemed special distributions to the related
parties and recorded as a reduction of paid-in capital.

In 1994, the Company acquired the outstanding minority interest in STL for
cash and notes payable of approximately $1,302,000 and $3,039,000, respectively.

Maritime Transport Development Corp., which is owned by the former Chairman
of the Company, receives a commission equal to 1.25% of charter hire
(approximately $210,000, $190,000, and $210,000 for the years ended December 31,
1993, 1994, and 1995, respectively) received by the Company for the Seabulk
Challenger and the Seabulk Magnachem as payment for development and engineering
services and marketing services related to the design of these vessels.

F-25
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

7. EMPLOYEE BENEFIT PLANS

The Company sponsors a Section 401(k) retirement plan covering substantially
all employees. Expense under this plan for the years ended December 31, 1993,
1994 and 1995, and for the three months ended March 31, 1995 and 1996, was
approximately $724,000, $834,000 and $1,047,000, and $244,000 and $297,000,
respectively. Contributions under the plan are determined on the basis of
employee compensation.

8. INCOME TAXES

The components of the provision for (benefit from) income taxes are as
follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31 MARCH 31
1993 1994 1995 1995 1996
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Current.......................... $ 471 $ -- $ -- $ -- $ --
Deferred......................... 1,402 189 (2) -- 35
------ ------ ------ ------ ------
$1,873 $ 189 $ (2) $ -- $ 35
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>

Incomes taxes paid were approximately $18,000, $400,000, and $0 in 1993,
1994, and 1995, respectively.

A reconciliation of the Company's income tax rate to the federal rate of 34%
is as follows:

<TABLE>
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
Income tax expense (benefit) computed at the
statutory rate..................................... 34% 34% (34)%
State income taxes................................... 3 2 (2)
Capital Construction Funds........................... 8 16 24
Rate differential.................................... 4 -- --
Other................................................ 2 (17) 11
----- ----- -----
51% 35% (1)%
----- ----- -----
----- ----- -----
</TABLE>

F-26
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. INCOME TAXES--(CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred income tax assets and liabilities as of December 31, 1994
and 1995 are as follows:

<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Deferred income tax assets:
Net operating loss carryforward........................ $3,779 $ 8,388
Charitable contributions carryforward.................. 22 43
Alternative minimum tax credit carryforward............ 1,226 1,226
Accrued compensation................................... 142 315
Other.................................................. 12 161
------ -------
Total deferred income tax assets......................... 5,181 10,133
------ -------
Deferred income tax liabilities:
Fixed asset differences................................ 8,850 13,869
Deferred drydocking costs.............................. 617 581
Other.................................................. 33 --
------ -------
Total deferred income tax liabilities.................... 9,500 14,450
------ -------
Net deferred income tax liability........................ $4,319 $ 4,317
------ -------
------ -------
</TABLE>

At December 31, 1995, the Company had approximately $23,600,000 in net
operating loss carryforwards for federal income tax purposes, expiring in
various amounts from 1998 to 2010. In conjunction with the anticipated Offering,
the utilization of the Company's NOL's will be limited, based upon the estimated
value of the Company prior to the Offering, to approximately $2,000,000 per
year.

9. CAPITAL STOCK

On September 28, 1994, all the stock of the Predecessor Company was
exchanged for shares of the Company's stock (see Note 1). The fair value of the
Predecessor Company's common stock and the Company's common stock were
equivalent.

On September 29, 1994, all of the outstanding shares of Class A and Class B
Preferred Stock of the Predecessor Company were repurchased from the shareholder
for cash of $2,374,000, notes of $3,561,000 and certain agreements providing for
future payments over a specified term. The present value of the agreements
providing for future payments has been recorded in other liabilities in the
accompanying consolidated balance sheets and total approximately $1,350,000 and
$1,282,000 at December 31, 1994 and 1995, respectively.

Each share of the Company's Class A Common Stock is entitled to one vote per
share and each share of Class B Common Stock is entitled to ten votes per share.
Shares of Class C Common Stock are nonvoting. The holders of Class B Common
Stock are entitled to convert, at the holder's election and at any time, such
shares into shares of Class A Common Stock or Class C Common Stock at the rate
of one share of Class B Common Stock for one share of Class A Common Stock or
Class C Common Stock. The holders of Class C Common Stock are entitled to
convert, at the holder's election and subject to certain restrictions, such
shares into shares of Class A Common Stock at the rate of one share of Class C
Common Stock for one share of Class A Common Stock.

F-27
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. CAPITAL STOCK--(CONTINUED)
In connection with the issuance of the Junior Notes, the Company issued to
the note holders 765,733 shares of its Class B and Class C Common Stock and
Common Stock Contingent Share Issuances ("CSIs") to purchase a maximum of
554,495 additional shares of its common stock. The Junior Notes, shares of Class
A and Class C Common Stock and the CSIs were recorded based upon their estimated
fair values at the date of issuance. The CSIs are generally exercisable, at a
price equal to the par value of the underlying shares, at the earlier of a
qualified initial public offering of the Company's common stock, or September
30, 1998. The maximum amount of CSIs that may be exercised is based upon the
note holders return on their investment in the Company.

Simultaneously with the issuance of the CSIs, the Company entered into an
agreement with its Chairman and principal stockholder and certain trusts whereby
the principal stockholder and the trusts agreed to contribute pro rata a like
amount of shares of common stock to the Company concurrently with the issuance
of shares pursuant to the CSIs. Accordingly, issuance of shares pursuant to the
CSIs will not effect the Company's financial position or results of operations.

10. SIGNIFICANT CUSTOMER

The Company derived revenues from a long-term contract with one company
representing 13% to 22% of its revenues over the three year period ended
December 31, 1995.

11. ACQUISITIONS

On September 30, 1994, the Company acquired 24 vessels and associated spare
parts and other equipment. The Company paid an aggregate amount of approximately
$17,886,000, consisting of $17,056,000 in cash and the assumption of $279,000 of
vessel mortgages and $551,000 of bareboat charter obligations. The operations of
these acquired assets for the periods subsequent to September 30, 1994 are
included in the accompanying consolidated statements of operations for the years
ended December 31, 1994 and 1995.

On September 30, 1994, the Company acquired SSMS in an acquisition accounted
for as a purchase. The aggregate purchase price of $13,900,000 was approximately
$8,615,000 in excess of the net assets acquired, which is being amortized using
the straight-line method over 20 years. The operations of SSMS for periods
subsequent to September 30, 1994 are included in the accompanying consolidated
statements of operations for the years ended December 31, 1994 and 1995.

On March 8, 1995, the Company acquired seven offshore crew vessels for
$5,875,000, including cash of $2,875,000 and a $3,000,000 promissory note. The
operations of these acquired vessels subsequent to March 8, 1995 are included in
the accompanying consolidated statement of operations for the year ended
December 31, 1995.

In January and February 1996, the Company acquired nine offshore crew
vessels under capital lease obligations. The operations of these vessels for the
period subsequent to their acquisition are included in the accompanying
unaudited consolidated statement of operations for the three months ended March
31, 1996.

F-28
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of financial instruments included in the following categories:

Cash and cash equivalents and accounts receivable. The carrying amounts
reported in the balance sheets approximates fair value.

Credit Facility, Mortgage note and Other. Amounts outstanding under the
Company's Credit Facility, as amended, bear interest at variable rates that
periodically adjust to reflect changes in overall market rates and
approximate fair value. Amounts outstanding in 1994 under the mortgage note
and other amounts approximate fair value due to their short-term nature.

Senior and Junior Notes. Amounts outstanding under the Senior and Junior
Notes bear interest at 12% and 8%, respectively. The fair value of the
Senior and Junior Notes is estimated to be $23.5 million and $16.5 million,
respectively, using a discounted cash flow analysis at estimated market
rates.

Notes Payable. The carrying amount reported in the balance sheets
approximates fair value using a discounted cash flow analysis at estimated
market rates.

13. CONDENSED FINANCIAL INFORMATION

The following are parent company-only condensed financial statements, and
notes thereto, of Hvide Marine Incorporated:

F-29
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

13. CONDENSED FINANCIAL INFORMATION--(CONTINUED)
PARENT COMPANY--ONLY CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31
1994 1995
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current Assets:
Deferred costs......................................................... $ 78 $ 38
------- -------
Total current assets..................................................... 78 38
Other assets:
Deferred costs, net.................................................. 1,358 1,235
Other (principally investment in wholly-owned subsidiaries).......... 29,524 31,614
------- -------
Total other assets....................................................... 30,882 32,849
------- -------
Total.................................................................... $30,960 $32,887
------- -------
------- -------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities (principally amounts due to wholly-owned
subsidiaries)............................................................ $ 215 $ 302
Long-Term Debt......................................................... 17,536 17,633
Other Noncurrent Liabilities (long-term payable)......................... 504 2,607
------- -------
Total liabilities...................................................... 18,255 20,542
Stockholders' Equity:
Common stock......................................................... 2 2
Other stockholders' equity........................................... 12,703 12,343
------- -------
Total stockholders' equity............................................... 12,705 12,345
------- -------
Total.................................................................... $30,960 $32,887
------- -------
------- -------
</TABLE>

PARENT COMPANY--ONLY CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(SEPTEMBER 28,
1994) THROUGH YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1995
-------------- ------------
(IN THOUSANDS)
<S> <C> <C>
Costs and expenses:
Professional fees............................................... $1,195 $ 151
Interest expense................................................ 549 2,218
Other........................................................... 331 81
------- ------------
Total costs and expenses.......................................... 2,075 2,450
Benefit from income taxes......................................... 714 871
------- ------------
1,361 1,579
Equity in net income of subsidiaries.............................. 717 1,219
------- ------------
Net loss.......................................................... $ 644 $ 360
------- ------------
------- ------------
</TABLE>

F-30
<PAGE>
HVIDE MARINE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

13. CONDENSED FINANCIAL INFORMATION--(CONTINUED)
BASIS OF PRESENTATION

In the parent company-only financial statements, the Company's investment in
subsidiaries is stated at cost plus equity in undistributed earnings of its
wholly-owned subsidiaries. The parent company-only financial statements should
be read in conjunction with the Company's consolidated financial statements.

LONG-TERM DEBT

On September 30, 1994, the Company issued the Junior Note (see Note 3).

The Company serves as co-guarantor of amounts under the Credit Facility and
Senior Note (see Note 3). Repayment of the Junior Note is subordinated to the
claims for amounts outstanding under the Credit Facility and the Senior Note.

DIVIDENDS FROM SUBSIDIARIES

No cash dividends have been paid to the Parent Company since inception as
the Company's Credit Facility prohibits the payment of dividends or other
distributions on any class of capital stock of the Company or its wholly-owned
subsidiaries.

STATEMENT OF CASH FLOWS

The statement of cash flows has been omitted as the Parent Company does not
maintain cash balances.

14. SUBSEQUENT EVENTS

On May 10, 1996, the Company's Board of Directors authorized a 1.5843-for-1
split of its common stock, and an increase of the number of authorized shares of
its Class A, Class B, and Class C Common Stock to 100,000,000, 5,000,000, and
2,500,000, respectively. All share and per share data in the accompanying
financial statements have been restated to reflect the stock split.

The Company entered into asset purchase agreements with Seal Fleet, Inc.
("Seal Fleet") and certain related partnerships dated as of March 29, 1996 and
amended as of July 23, 1996 pursuant to which the Company has agreed to purchase
an aggregate of eight supply boats. The aggregate purchase price is $26,075,000.
The purchase of certain of the supply boats is subject to the approval of the
Seal Fleet shareholders. The Company has agreed to indemnify certain affiliates
of Seal Fleet against certain of Seal Fleet's liabilities due to its creditors.
The Company's maximum liability pursuant to the indemnification is $7,000,000.
The Company has also agreed to indemnify Seal Fleet, the members of its Board of
Directors, and such affiliates for certain liabilities they may incur as a
result of the Board's approval of the Seal Fleet Acquisition.

On June 21, 1996, the Company amended its Credit Facility whereby upon a
successful initial public offering with gross proceeds of at least $91,000,000,
amounts available under the Original Line will increase to $10,000,000, amounts
available under the term loan will increase to $60,500,000 and the Vessel
Acquisition Line of Credit will increase to $25,000,000. To the extent that the
gross proceeds of the Offering are less than $91.0 million, including proceeds
from the exercise of the Underwriters' over-allotment option, if any, the
initial amount available under the Vessel Acquisition Line of Credit will be
reduced by the amount of such shortfall.

F-31
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Boards of Directors and Stockholder of OMICHEM TRANSPORT, INC.,
OMI CLOVER TRANSPORT, INC., and OMI HUDSON TRANSPORT, INC.:

We have audited the accompanying combined balance sheets of the OMI Chemical
Carrier Group as of December 31, 1994 and 1995 and the related combined
statements of operations and deficit and of cash flows for each of the three
years in the period ended December 31, 1995. The combined financial statements
include the accounts of Omichem Transport, Inc., OMI Clover Transport, Inc., and
OMI Hudson Transport, Inc. which are wholly owned subsidiaries of OMI Corp.
These financial statements are the responsibility of the companies' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the combined financial position of the OMI Chemical Carrier Group at
December 31, 1994 and 1995 and the combined results of their operations and
their combined cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

New York, New York
January 26, 1996

F-32
<PAGE>
OMI CHEMICAL CARRIER GROUP
COMBINED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1994 1995 1996
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Advances to masters....................................... $ 171 $ 102 $ 275
Receivables:
Due from OSTC (Notes 1, 3).............................. 638 544 511
Other................................................... 40 52 27
Deferred income taxes (Note 4)............................ 731 9,176 483
Prepaid expenses and other current assets................. 987 524 180
-------- -------- -----------
Total current assets.................................. 2,567 10,398 1,476
-------- -------- -----------
Vessels (Notes 1, 3)........................................ 75,225 84,738 113,499
Less accumulated depreciation............................... (43,872) (47,066) (48,128)
-------- -------- -----------
Vessels--net.............................................. 31,353 37,672 65,371
-------- -------- -----------
Due from parent (Notes 4, 6)................................ 3,983 7,086
Other assets and deferred charges........................... 1,537 1,094 1,025
-------- -------- -----------
Total....................................................... $ 39,440 $ 49,164 $ 74,958
-------- -------- -----------
-------- -------- -----------
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... $ 1,328 $ 389 $ 443
Accrued liabilities:
Voyage and vessel....................................... 2,524 2,273 3,076
Interest................................................ 498 432 243
Operating lease (Note 3)................................ 738 756
Accrued lease termination costs (Note 5).................. 25,000
Accrued loss on lease obligation (Note 5)................. 1,487
Current portion of long-term debt (Notes 2, 3)............ 2,525 2,525 4,815
-------- -------- -----------
Total current liabilities............................. 9,100 31,375 8,577
-------- -------- -----------
Long-term debt (Notes 2, 3)................................. 17,488 14,963 30,980
Accrued loss on lease obligation (Note 5)................... 18,313
Deferred income taxes (Note 4).............................. 1,523 8,797 8,750
Due to parent (Notes 4, 6).................................. 1,535
Advances from parent (Note 3)............................... 9,623 9,623
Accrued lease payable (Note 3).............................. 2,243
Deferred gain on sale/leaseback of vessel (Note 3).......... 1,281
Advance time charter revenues and other liabilities......... 1,447 830 985
Commitments and contingencies (Note 7)......................
Stockholder's equity (deficit):
Common stock..............................................
Capital surplus (Note 3).................................. 80,881 80,881 115,181
Deficit (Note 1).......................................... (92,836) (98,840) (99,138)
-------- -------- -----------
Total stockholder's equity (deficit).................. (11,955) (17,959) 16,043
-------- -------- -----------
Total....................................................... $ 39,440 $ 49,164 $ 74,958
-------- -------- -----------
-------- -------- -----------
</TABLE>

See notes to combined financial statements

F-33
<PAGE>
OMI CHEMICAL CARRIER GROUP
COMBINED STATEMENTS OF OPERATIONS AND DEFICIT
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
FOR THE YEARS ENDED DECEMBER 31, ENDED MARCH 31,
1993 1994 1995 1995 1996
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues................................ $ 24,434 $ 26,564 $ 26,099 $ 6,658 $ 6,307
-------- -------- -------- -------- -----------
Operating Expenses:
Vessel and voyage..................... 17,418 17,711 18,287 4,419 4,087
Depreciation and amortization......... 3,672 3,878 3,355 671 1,062
Operating lease (Note 3).............. 10,730 10,805 7,557 2,317 755
Provision for losses (Notes 3, 5):
Impaired value of vessel............ 14,798
Lease obligation.................... 19,800 3,297
General and administrative (Note 6)... 827 854 848 214 209
-------- -------- -------- -------- -----------
Total operating expenses.......... 32,647 67,846 33,344 7,621 6,113
-------- -------- -------- -------- -----------
Operating (loss) income................. (8,213) (41,282) (7,245) (963) 194
-------- -------- -------- -------- -----------
Other Income (Expense):
Gain on disposal of assets (Note 3)... 334 333 167 84
Interest expense...................... (2,888) (2,253) (2,161) (478) (652)
Interest income....................... 109 105 1
-------- -------- -------- -------- -----------
Net other expense................. (2,445) (1,815) (1,993) (394) (652)
-------- -------- -------- -------- -----------
Loss before income taxes................ (10,658) (43,097) (9,238) (1,357) (458)
Benefit for income taxes (Note 4)....... 3,293 15,084 3,234 475 160
-------- -------- -------- -------- -----------
Net loss................................ (7,365) (28,013) (6,004) (882) (298)
Deficit, beginning of year.............. (57,458) (64,823) (92,836) (92,836) (98,840)
-------- -------- -------- -------- -----------
Deficit, end of year.................... $(64,823) $(92,836) $(98,840) $(93,718) $ (99,138)
-------- -------- -------- -------- -----------
-------- -------- -------- -------- -----------
</TABLE>

See notes to combined financial statements

F-34
<PAGE>
OMI CHEMICAL CARRIER GROUP
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEARS MONTHS
ENDED DECEMBER 31, ENDED MARCH 31,
1993 1994 1995 1995 1996
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net loss................................. $(7,365) $(28,013) $ (6,004) $ (882) $ (298)
Adjustments to reconcile net loss to cash
provided by operating activities:
(Decrease) increase in deferred income
taxes...................................... (461) (13,629) (1,171) (121) 8,646
Depreciation and amortization.......... 3,672 3,878 3,355 671 1,062
Gain on disposal of assets--net........ (334) (333) (167) (84)
Provision for losses on vessel and
lease...................................... 34,598 3,297
Changes in Assets and Liabilities:
Decrease (increase) in receivables and
other current assets....................... 135 (371) 614 356 229
(Decrease) increase in accounts payable
and accrued expenses....................... (1,814) 2,614 (1,975) 669 685
Decrease (increase) in due from (to)
parent..................................... 8,346 3,654 5,518 831 (8,621)
Decrease (increase) in other assets and
deferred charges........................... 260 (200) 443 80 69
Increase (decrease) in advance time
charter revenues and other liabilities..... 1,369 78 (617) 95 155
Other assets & liabilities--net........ 1,257 133
------- -------- -------- ------- -------
Net cash provided by operating
activities................................. 5,065 2,276 3,426 1,615 1,927
------- -------- -------- ------- -------
CASH FLOWS (USED) PROVIDED BY INVESTING
ACTIVITIES:
Additions to vessels..................... (3,040) (351) (10,524) (352) (664)
Proceeds received on note receivable..... 500 1,500
------- -------- -------- ------- -------
Net cash (used) provided by investing
activities................................. (2,540) 1,149 (10,524) (352) (664)
------- -------- -------- ------- -------
CASH FLOWS (USED) PROVIDED BY FINANCING
ACTIVITIES:
Payments on long-term debt............... (2,525) (3,425) (2,525) (1,263) (1,263)
Advances from parent..................... 9,623
------- -------- -------- ------- -------
Net cash (used) provided by financing
activities................................. (2,525) (3,425) 7,098 (1,263) (1,263)
------- -------- -------- ------- -------
Net (decrease) increase in cash............ $ -- $ -- $ -- $ -- $ --
------- -------- -------- ------- -------
------- -------- -------- ------- -------
</TABLE>

See notes to combined financial statements

F-35
<PAGE>
OMI CHEMICAL CARRIER GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1995
AND (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Combined Statements--The combined financial statements for the OMI
Chemical Carrier Group (the "Group" or "Companies") include the financial
statements of Omichem Transport, Inc., OMI Clover Transport, Inc., and OMI
Hudson Transport, Inc. which are wholly owned subsidiaries of OMI Corp. ("OMI").
The three companies each own a vessel (OMI Star, OMI Hudson and OMI Dynachem,
respectively) which is time chartered to a joint venture, Ocean Specialty
Tankers Corporation ("OSTC"), owned by OMI and Seabulk Ocean Systems Corporation
("SOSC"), a subsidiary of Hvide Marine Incorporated ("Hvide") (see Note 3). OSTC
contracts with customers for ocean shipping of liquid chemicals.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Since inception, the Companies have incurred cumulative losses aggregating
over $99,000,000 at March 31, 1996. The Companies have been able to sustain
their ongoing operations because of OMI's commitment to provide funding for
working capital and other purposes. These financial statements have been
prepared on the assumption that OMI will continue to provide required funding in
the future.

In October 1995, OMI entered into an agreement with Hvide for the sale of
the OMI Star, OMI Hudson and OMI Dynachem and its interest in OSTC for
approximately $64,650,000, $30,000,000 in cash and the assumption of all
outstanding indebtedness relating to the vessels ($34,650,000 at June 2, 1996).
The agreement was amended April 30, 1996 to swap the OMI Dynachem for a
replacement vessel to be identified at a later date. Cash of $12,775,000 (of the
$30,000,000) will be transferred to an escrow account at delivery until such
vessel is identified and delivered. The sale of these three vessels and the
interest in OSTC is contingent upon Hvide successfully completing its initial
public offering of common stock in 1996.

Operating Revenues and Expenses--Voyage revenues are earned and recognized
on a daily basis and are subject to adjustments based on the operating results
of OSTC.

Special survey and drydock expenses are accrued and charged to operating
expense over the survey cycle, which generally is a two- to three-year period.
The accruals of such expenses are based on management's best estimates of future
cost and the expected length of the survey cycle. However, the ultimate
liability may be more or less than such estimates.

Vessels and Improvements--Vessels are recorded at cost. Depreciation for
financial reporting purposes is provided principally on the straight-line method
based on the estimated useful lives of the vessels up to the vessels' estimated
salvage value. The useful lives of the vessels are 25 and 30 years. Salvage
value is based upon a vessel's light weight tonnage multiplied by a scrap rate.

Improvements on leased vessels are amortized on the straight-line method
over the lives of the leases.

In the event that facts and circumstances indicate that the carrying amount
of a vessel may be impaired, an evaluation of recoverability is performed. If an
evaluation is required, the estimated future

F-36
<PAGE>
OMI CHEMICAL CARRIER GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
undiscounted cash flows associated with the vessel are compared to the vessel's
carrying value to determine if a write-down to fair value or discounted cash
flow is required (see Note 5).

The Companies adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" effective January 1, 1995. Adoption of this statement did not
have a material effect on the Companies' combined financial position or results
of operations.

Income Taxes--The Companies are included in a consolidated Federal income
tax return filed by OMI which includes all eligible subsidiary Companies. The
accompanying financial statements include for each subsidiary in the Group a
cost or benefit for Federal income taxes based on the related separate taxable
income of each subsidiary. Deferred income taxes are recorded under the
provisions of Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."

Retirement Plans--The Companies comprising the Group make contributions to
union sponsored multi-employer pension plans covering seagoing personnel.
Contributions to these plans amounted to approximately $218,000, $276,000, and
$262,000 for the years ended December 31, 1993, 1994 and 1995 and $53,000 and
$38,000 for the three months ended March 31, 1995 and 1996, respectively. If
these Companies were to withdraw from the plans or the plans were to terminate,
the Companies would be liable for a portion of any unfunded plan benefits that
might exist. The Group has been advised by the trustees of such plans that it
has no withdrawal liability as of December 31, 1995.

Cash Flows--During the years ended December 31, 1993, 1994 and 1995, the
Group paid interest of $2,504,000, $1,932,000, and $1,475,000, respectively.
During the three months ended March 31, 1995 and 1996 the Group paid interest of
$870,000 and $841,000, respectively.

2. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1994 1995 1996
<S> <C> <C> <C>
Bonds, secured by a vessel, at 5.35% and 10.1%
payable in installments to 2006..................... $20,013,000 $17,488,000 $35,795,000
Less: current portion of long-term debt............. 2,525,000 2,525,000 4,815,000
----------- ----------- -----------
Long-term debt...................................... $17,488,000 $14,963,000 $30,980,000
----------- ----------- -----------
----------- ----------- -----------
Fair value of long-term debt........................ $19,871,000 $18,926,000 $39,637,000
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

The bonds are collateralized by a mortgage on the OMI Dynachem and OMI
Hudson and are guaranteed as to principal and interest by the U.S. Government
under the Title XI Program. At March 31, 1996, the vessels (net book values
aggregating $56,993,000) and investments of $9,717,000 held by OMI Corp. in its
Capital Construction and other restricted funds have been pledged as collateral
for the long-term debt issues. The security arrangement restricts OMI Hudson
Transport, Inc. and OMI Clover Transport, Inc. ("OMI Clover") from, among other
things, the withdrawal of capital, the payment of common stock dividends and the
extending of loans to affiliated parties.

F-37
<PAGE>
OMI CHEMICAL CARRIER GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

2. LONG-TERM DEBT--(CONTINUED)
Subsequent to December 31, 1995, aggregate annual maturities of the bonds
during each of the next five years 1996 through 2000 were $2,525,000. Subsequent
to March 31, 1996, aggregate maturities for a twelve month period on such bonds
in the next five years through 2001 are $4,815,000.

The fair value of the bonds is estimated based on current rates available
for similar issues.

3. OPERATING LEASES

Total rent expense, which relates to two vessels, amounted to $10,730,000,
$10,805,000 and $7,557,000 for the years ended December 31, 1993, 1994 and 1995,
respectively. Rent expense for the three months ended March 31, 1995 and 1996
was $2,317,000 and $755,000, respectively.

OMI Clover has operated the vessel OMI Hudson under a long-term operating
lease requiring semi-annual payments through December 2006. In October 1995, OMI
Clover entered into an agreement with the owner/lessor of the OMI Hudson to
terminate the operating lease for $25,000,000 and subsequently purchase the
vessel for $30,000,000. The estimated loss on lease termination of $3,297,000
was reported as a separate item in the 1995 Combined Statement of Operations and
Deficit. In February 1996, OMI Clover terminated the operating lease on the
vessel for $22,000,000 cash and the issuance of a $3,000,000 Convertible Note by
OMI. In March 1996, OMI Clover purchased the vessel for cash of $9,300,000
($10,430,000 less reimbursement of a portion of the lease payment of $1,130,000
in accordance with the agreement) and assumption of debt of $19,570,000 (see
Note 2). The $31,300,000 cash paid by OMI on behalf of OMI Clover and the
$3,000,000 Note issued by OMI aggregating $34,300,000 to terminate the lease and
purchase the vessel was recorded as a capital contribution to OMI Clover.

In 1992, Omichem Transport, Inc. ("Omichem") entered into a sale/leaseback
transaction for the OMI Star. Omichem received $11,500,000 in cash, of which
$3,500,000 was used to pay the mortgage on the vessel, a $2,000,000 secured note
receivable paid December 1994 and a six year lease. The gain on the transaction
of approximately $2,001,000 was deferred and amortized over the life of the
lease until June 29, 1995 when Omichem repurchased the OMI Star for $9,623,000.
The funds to purchase the OMI Star were in the form of a long-term advance from
OMI at a variable rate based on the London Interbank Offering Rate.

The three vessels operated by the Group are time chartered to OSTC, a joint
venture between OMI and SOSC. The balances included in the financial statements
due from OSTC represent charter hire receivables.

As of December 31, 1995 the Companies have time charter agreements with OSTC
for initial terms ending May 31, 2000, with extension options after that date.
The vessels are under charter for "base" hire rates dependent upon the
performance of the vessels.

F-38
<PAGE>
OMI CHEMICAL CARRIER GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

4. INCOME TAXES

A summary of the components of the benefit for income taxes is as follows:
<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEARS MONTHS
ENDED DECEMBER 31, ENDED MARCH 31,
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
Current benefit.............. $(2,542) $ (1,156) $(1,766) $(280) $(8,733)
Deferred tax benefit......... (461) (13,629) (1,171) (120) 8,646
------- -------- ------- ----- -------
Benefit for income taxes as
originally reported for
internal purposes.......... (3,003) (14,785) (2,937) (400) (87)
Current benefit for allocated
general and administrative
expenses (see Note 6)........ (290) (299) (297) (75) (73)
------- -------- ------- ----- -------
Total........................ $(3,293) $(15,084) $(3,234) $(475) $ (160)
------- -------- ------- ----- -------
------- -------- ------- ----- -------
</TABLE>

Deferred income taxes are payable to OMI. The components of deferred income
taxes relate to tax effects of temporary differences as follows:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1994 1995 1996
<S> <C> <C> <C>
Deferred tax liabilities:
Differences between book and tax basis of
vessels....................................... $ 9,424 $ 9,108 $ 9,088
Other....................................... 54 74 75
------- ------- ---------
Total deferred tax liabilities.......... 9,478 9,182 9,163
------- ------- ---------
Deferred tax assets:
Future lease liability accrual.............. (6,930) (8,750)
Accrual for drydocking...................... (567) (811) (896)
Accrued lease payable....................... (785)
Deferred gain on sale/leaseback............. (404)
------- ------- ---------
Total deferred tax assets............... (8,686) (9,561) (896)
------- ------- ---------
Deferred income taxes--net.................... $ 792 $ (379) $ 8,267
------- ------- ---------
------- ------- ---------
</TABLE>

On August 2, 1993, Congress passed the Omnibus Budget Reconciliation Act of
1993 (the "Act"). The major component of the Act affecting the Group was the
retroactive increase in the marginal corporate tax rate from 34 percent to 35
percent, increasing the 1993 deferred income taxes of the Group by $438,000 to
comply with the provisions of the Act.

5. IMPAIRMENT AND PROVISION FOR LOSS ON VESSEL LEASE OBLIGATION

As part of the periodic review of the recoverability of the investment in
vessels, in 1994 management determined that the carrying value of the OMI
Dynachem exceeded the undiscounted forecasted future net cash flows from its
operations. This indicated that an impairment loss for this vessel should be
recognized. This loss was measured by the excess of the carrying value of the
vessel over its estimated fair value which was based on values provided by two
shipbrokers. The carrying value was reduced by $14,798,000, which is reported as
a separate item in the 1994 Combined Statement of Operations and Deficit.

As part of this periodic review, it also was determined that a similar loss
should be recognized for the forecasted loss from operations of the OMI Hudson
which is chartered-in on an operating lease

F-39
<PAGE>
OMI CHEMICAL CARRIER GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONCLUDED)

5. IMPAIRMENT AND PROVISION FOR LOSS ON VESSEL LEASE OBLIGATION-- (CONTINUED)
through 2006. The amount of the loss was estimated based on forecasted
undiscounted cash flows, excluding from rent expense an amount representative of
the interest component of the lease agreement, through the lease expiration
date. This loss, estimated as $19,800,000, is also reported as a separate item
in the 1994 Combined Statement of Operations and Deficit.

6. TRANSACTIONS WITH PARENT

Due from (to) Parent represents tax benefits currently due from OMI reduced
by non-interest bearing advances from OMI to fund the Group's operations. OMI
maintains a centralized cash management system whereby it accepts and deposits
all cash receipts on behalf of its subsidiaries and pays all costs, expenses and
other obligations of such subsidiaries. These disbursements primarily represent
vessel and voyage expenses, lease payments, interest expense and required
payments of long-term debt. The average balances due from (to) OMI (based on
individual monthly balances outstanding) are as follows:

<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEARS MONTHS
ENDED DECEMBER 31, ENDED MARCH 31,
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
$11,957 $5,307 $1,535 $3,567 $(1,526)
</TABLE>

OMI provides all general and administrative services for the Group and has
not followed the practice of allocating general and administrative expenses
incurred by OMI to its various domestic subsidiaries although it does allocate
such costs to its various foreign subsidiaries. For purposes of the accompanying
financial statements, provision has been made during each period for the
allocation of general and administrative costs to the Group on a basis similar
to that used by OMI for allocation of such costs to foreign subsidiaries as
follows:

<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEARS MONTHS
ENDED DECEMBER 31, ENDED MARCH 31,
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
Allocated general and adminis-
trative costs.................. $ 827 $ 854 $ 848 $ 214 $ 209
Benefit for income taxes (see
Note 4)........................ (290) (299) (297) (75) (73)
------- ------ ------ ------ -------
$ 537 $ 555 $ 551 $ 139 $ 136
------- ------ ------ ------ -------
------- ------ ------ ------ -------
</TABLE>

The method used allocates fixed annual amounts of costs on a per vessel
basis for financial accounting and vessel management activities and allocates
costs for general corporate activities based on 1.25 percent of revenues earned
by each vessel. Management of OMI believes that this allocation method is
reasonable.

7. CONTINGENT LIABILITIES

Companies in the Group are defendants in various legal actions from shipping
operations. Such actions are covered by insurance or, in the opinion of
management after review with counsel, are of such a nature that the ultimate
liability, if any, would not have a material adverse effect on the combined
financial statements.

F-40
<PAGE>
INDEPENDENT AUDITORS' REPORT

Partners of
INDIAN SEAL PARTNERS, LTD.,
BAFFIN SEAL PARTNERS, LTD.,
BALTIC SEAL PARTNERS, LTD.,
BENGAL SEAL PARTNERS, LTD., and
ROSS SEAL PARTNERS, LTD.

We have audited the accompanying Combined Statements of Vessel Operations of
Indian Seal Partners, Ltd., Baffin Seal Partners, Ltd., Baltic Seal Partners,
Ltd., Bengal Seal Partners, Ltd., and Ross Seal Partners, Ltd. (collectively
"the Seal Partners") for the years ended December 31, 1995, 1994 and 1993. These
financial statements are the responsibility of the management of the Seal
Partners. Our responsibility is to express an opinion on these financial
statements based on our audits.

As described in Note 1, the combined financial statements referred to above
have been prepared in accordance with the Asset Purchase Agreement between the
Seal Partners and Hvide Marine Incorporated, dated March 29, 1996, and amended
July 23, 1996, for the sale of certain assets and operations to Hvide Marine
Incorporated (the "Agreement") and are not intended to be complete presentations
of the Seal Partners' revenues and expenses.

In our opinion, the combined statements referred to above present fairly, in
all material respects, the combined vessel operations of the Seal Partners for
the years ended December 31, 1995, 1994, and 1993, pursuant to the Agreement
described in Note 1, in conformity with generally accepted accounting
principles.

PANNELL KERR FORSTER OF TEXAS, P.C.

Houston, Texas
April 12, 1996, except for the fourth paragraph of
Note 1, as to which the date is August 1, 1996

F-41
<PAGE>
INDIAN SEAL PARTNERS, LTD.
BAFFIN SEAL PARTNERS, LTD.
BALTIC SEAL PARTNERS, LTD.
BENGAL SEAL PARTNERS, LTD.
ROSS SEAL PARTNERS, LTD.
COMBINED STATEMENTS OF VESSEL OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
FOR THE YEAR ENDED DECEMBER 31, 31,
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Combined operating
revenues..................... $4,402,220 $4,150,519 $5,383,398 $1,254,719 $1,513,800

Combined operating expenses
Groceries.................. 16,742 30,490 49,741 11,364 13,313
Insurance claims........... 115,252 77,907 62,543 1,603 4,195
Insurance premiums......... 302,295 431,129 428,589 104,630 101,367
Medical.................... 14,809 37,549 44,242 9,854 8,552
Payroll taxes.............. 39,618 68,539 101,600 29,520 27,827
Repairs and maintenance.... 286,373 417,341 422,016 146,359 102,350
Safety training............ 18,792 30,163 34,919 5,424 8,789
Salaries--crews............ 690,960 995,602 1,297,067 321,196 320,662
Supplies................... 77,145 268,254 87,672 19,745 27,896
Taxes, licenses and
miscellaneous................ 42,910 168,467 154,769 17,044 24,301
Transportation--crews...... 133,148 84,888 93,453 17,908 13,912
---------- ---------- ---------- ---------- ----------

Total combined
operating expenses........... 1,738,044 2,610,329 2,776,611 684,647 653,164
---------- ---------- ---------- ---------- ----------

Excess of combined
operating revenues
over expenses................ $2,664,176 $1,540,190 $2,606,787 $ 570,072 $ 860,636
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

See notes to financial statements.

F-42
<PAGE>
INDIAN SEAL PARTNERS, LTD.
BAFFIN SEAL PARTNERS, LTD.
BALTIC SEAL PARTNERS, LTD.
BENGAL SEAL PARTNERS, LTD.
ROSS SEAL PARTNERS, LTD.
NOTES TO COMBINED FINANCIAL STATEMENTS

NOTE 1--BASIS OF PRESENTATION

The accompanying combined financial statement includes certain accounts of:

<TABLE>
<CAPTION>
NAME OF ENTITY TYPE OF ENTITY NAME OF SHIP
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Indian Seal Partners, Ltd. Limited Partnership Indian Seal--204 Feet
Baffin Seal Partners, Ltd. Limited Partnership Baffin Seal--185 Feet
Baltic Seal Partners, Ltd. Limited Partnership Baltic Seal--205 Feet
Bengal Seal Partners, Ltd. Limited Partnership Bengal Seal--185 Feet
Ross Seal Partners, Ltd. Limited Partnership Ross Seal--163 Feet
</TABLE>

Each of the five limited partnerships above (collectively "the Seal
Partners") owns an offshore service ship (collectively "the Seal Partners
Ships"). These entities have been combined because they have common partners and
have collectively entered into an Asset Purchase Agreement to sell certain
assets. There have been no significant intercompany transactions or interrelated
activities between these entities.

The Baltic Seal was purchased by Baltic Seal Partners, Ltd. in February 1994
and was placed in service in August 1994 after a period of drydocking.

According to the terms of the Asset Purchase Agreement dated March 29, 1996,
and amended July 23, 1996 the Seal Partners have committed to sell certain
assets which include the Seal Partners Ships and related improvements to Hvide
Marine Incorporated ("Hvide"). In accordance with the July 1996 amendment, Hvide
will purchase the assets for the price of $16.0 million.

The accompanying combined statements of vessel operations include only
operating revenues and direct expenses related solely to the assets to be
acquired by Hvide. Other operating results of the Seal Partners are omitted from
the statements as they do not directly relate to the assets being sold to Hvide.

The accompanying combined statements of vessel operations (i) include the
operating revenues and operating expenses directly related to the operations of
the Seal Partners Ships, and (ii) exclude depreciation, general and
administrative overhead allocations, management fees, interest expense and
income taxes.

General and administrative expenses have been excluded since Seal Partners
have operations other than the vessel operations presented herein. Seal Partners
do not allocate general and administrative expenses among specific operations or
vessels.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
__Operating revenues

All operating revenues are earned from time charters and recognized based on
contract day rates.

F-43
<PAGE>
INDIAN SEAL PARTNERS, LTD.
BAFFIN SEAL PARTNERS, LTD.
BALTIC SEAL PARTNERS, LTD.
BENGAL SEAL PARTNERS, LTD.
ROSS SEAL PARTNERS, LTD.
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3--ASSETS TO BE SOLD BY THE SEAL PARTNERS (UNAUDITED)

The following presents the combined historical costs of acquisition and
accumulated depreciation of the assets to be sold to Hvide which have been
recorded by the Seal Partners (unaudited):

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
Vessels.................. $10,761,504 $11,411,504 $11,411,504 $11,411,504 $11,411,504
Accumulated
depreciation............. (7,445,096) (7,971,650) (8,514,471) (8,107,354) (8,650,177)
----------- ----------- ----------- ----------- -----------
Net...................... $ 3,316,408 $ 3,439,854 $ 2,897,033 $ 3,304,150 $ 2,761,327
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>

The costs of major improvements to the vessels which have been made by the
Seal Partners have not been capitalized and depreciated, are excluded from the
above unaudited schedule, and aggregated $481,765, $3,487,435 and $922,475
during the years ended December 31, 1995, 1994, and 1993, respectively and
$407,604 and $226,630 during the three months ended March 31, 1996 and 1995,
respectively. Additional costs of improvements were incurred during periods
prior to 1993.

Depreciation expense, based on useful lives of 7 to 32 years for the vessels
and approximately three years for the related improvements presented herein, is
approximately $2,093,000, $1,415,000 and $608,000 for the years ended December
31, 1995, 1994 and 1993, respectively, and $543,000 and $503,000 for the three
months ended March 31, 1996 and 1995, respectively.

The assets of the Seal Partners that are not being sold to Hvide have been
excluded from the table above. No liabilities of the Seal Partners are to be
assumed in connection with the Agreement.

NOTE 4--ALLOCATION OF PURCHASE PRICE (UNAUDITED)

In accordance with the Agreement, as amended, the purchase price of the
assets of $16.0 million will be allocated to the vessels.

Based upon Hvide's policies, the vessels will be depreciated on a straight
line basis over 8 to 26 years.

F-44
<PAGE>
INDEPENDENT AUDITORS' REPORT

Board of Directors of
Seal Fleet, Inc.

We have audited the accompanying Statements of Assets to be Sold of Seal
Fleet, Inc. and Subsidiaries as of December 31, 1995, 1994 and 1993 and the
related Statements of Vessel Operations for the years then ended. These
financial statements are the responsibility of the management of Seal Fleet,
Inc. Our responsibility is to express an opinion on these financial statements
based on our audits.

As described in Note 1, the financial statements referred to above have been
prepared in accordance with the Asset Purchase Agreement between Seal Fleet,
Inc. and Subsidiaries and Hvide Marine Incorporated dated March 29, 1996, and
amended July 23, 1996 for the sale of certain assets and operations to Hvide
Marine Incorporated (the "Agreement") and are not intended to be complete
presentations of Seal Fleet, Inc. and Subsidiaries' assets, liabilities,
revenues and expenses.

In our opinion, the statements referred to above present fairly, in all
material respects, the assets to be sold of Seal Fleet, Inc. and Subsidiaries as
of December 31, 1995, 1994 and 1993 and the related vessel operations for the
years then ended, pursuant to the Agreement described in Note 1, in conformity
with generally accepted accounting principles.

PANNELL KERR FORSTER OF TEXAS, P.C.

Houston, Texas
April 12, 1996, except for the second paragraph of Note 1,
as to which the date is August 1, 1996

F-45
<PAGE>

SEAL FLEET, INC. AND SUBSIDIARIES
STATEMENTS OF ASSETS TO BE SOLD

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1993 1994 1995 1996
(UNAUDITED)
<S> <C> <C> <C> <C>
Vessels.................................... $9,922,088 $9,922,088 $9,922,088 $9,922,088
Accumulated depreciation................... (6,320,197) (6,819,771) (7,319,309) (7,417,261)
Deferred drydocking (net).................. 558,412 315,323 643,049 836,027
Inventory.................................. 125,652 125,652 49,127 49,127
---------- ---------- ---------- ----------
Total.............................. $4,285,955 $3,543,292 $3,294,955 $3,389,981
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>

See notes to financial statements.

F-46
<PAGE>

SEAL FLEET, INC. AND SUBSIDIARIES
STATEMENTS OF VESSEL OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS
FOR THE YEAR ENDED DECEMBER 31, ENDED MARCH 31,
1993 1994 1995 1995 1996
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating revenues................ $3,155,315 $3,333,704 $3,267,072 $786,124 $841,239

Operating expenses
Depreciation.................... 498,140 498,144 498,139 125,969 97,952
Engineering allocation.......... 58,284 19,576 42,530 13,299 10,890
Groceries....................... 24,606 12,395 16,167 6,575 5,532
Insurance claims................ 41,886 43,481 12,589 (3,196) 8,994
Insurance premiums.............. 243,954 237,558 232,565 59,647 56,744
Medical......................... 20,479 14,259 19,423 4,114 4,899
Payroll taxes................... 48,637 50,326 65,934 19,621 19,282
Repairs and maintenance......... 416,337 412,302 471,493 105,429 102,217
Safety training................. 16,016 15,349 17,736 6,643 6,180
Salaries--crews................. 612,871 675,786 731,030 177,909 182,750
Supplies........................ 49,607 26,737 27,915 8,764 6,691
Taxes, licenses and
miscellaneous..................... 81,118 34,964 40,668 10,279 7,696
Transportation--crews........... 17,379 64,731 45,255 12,910 6,139
---------- ---------- ---------- -------- --------

Total operating
expenses.......................... 2,129,314 2,105,608 2,221,444 547,963 515,966
---------- ---------- ---------- -------- --------

Excess of operating
revenues over expenses............ $1,026,001 $1,228,096 $1,045,628 $238,161 $325,273
---------- ---------- ---------- -------- --------
---------- ---------- ---------- -------- --------
</TABLE>

See notes to financial statements.

F-47
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

NOTE 1--BASIS OF PRESENTATION

Seal Fleet, Inc. and Subsidiaries ("Seal Fleet") own and manage the
following three offshore service ships (the "Seal Fleet Ships").

China Seal--176 Feet
Hawke Seal--185 Feet
Pegasus Seal--185 Feet

In accordance with an Asset Purchase Agreement with Hvide Marine
Incorporated ("Hvide"), dated March 29, 1996, and amended July 23, 1996 Seal
Fleet committed to sell the Seal Fleet Ships, related improvements, and
inventory to Hvide. In accordance with the July 1996 amendment, Hvide will
purchase the assets for the price of $9.6 million and provide the sum of
$475,000 to Seal Fleet for its use in downsizing its operations.

The accompanying statements of assets include only those assets to be sold.
They are presented at their historical cost, less any accumulated depreciation
and amortization.

The assets and liabilities of Seal Fleet which are not being sold to or
assumed by Hvide, are omitted from the accompanying statements of assets, as
such statements are not intended to be complete financial statements of Seal
Fleet.

The accompanying statements of vessel operations include only operating
revenues and direct expenses related solely to the assets to be acquired by
Hvide. Other operating results of Seal Fleet are omitted from the statements as
they do not directly relate to the assets being sold to Hvide.

The accompanying statements of vessel operations (i) include the operating
revenues and operating expenses directly related to the operations of the Seal
Fleet Ships, and (ii) exclude general and administrative overhead allocations,
intercompany commissions allocated among Seal Fleet, Inc. and its Subsidiaries,
interest expense and income taxes.

General and administrative expenses have been excluded since Seal Fleet has
operations other than the vessel operations presented herein. Seal Fleet does
not allocate general and administrative expenses among specific operations or
vessels.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Vessels and Improvements

Vessels and improvements include two seismic ships and one supply service
ship and are stated at cost less accumulated depreciation. Depreciation is
computed on the straight-line method using estimated useful lives of twenty
years. Major improvements are capitalized as deferred drydocking and are
amortized over the estimated period benefitted of eighteen months to four years
while replacements, maintenance and repairs which do not improve or extend the
lives of the assets are expensed as incurred. The costs of annual drydocking and
inspections of the ships are expensed as incurred.

Operating revenues

Operating revenues are earned from time charters and are recognized based on
contract day rates for the Seal Fleet Ships.

NOTE 3--DEFERRED DRYDOCKING

The costs of major improvements to the vessels, which have been capitalized
as deferred drydocking, aggregated $659,780, $22,719 and $476,922 during the
years ended December 31, 1995, 1994

F-48
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3--DEFERRED DRYDOCKING--(CONTINUED)

and 1993, respectively, and $616,530 and $11,939 during the three months ended
March 31, 1996 and 1995, respectively.

NOTE 4--ALLOCATION OF PURCHASE PRICE (UNAUDITED)

In accordance with the Agreement, as amended, the following is the expected
allocation of the purchase price of the assets (in thousands):

Vessels.................................................. $ 9,190
Deferred drydocking costs................................ 836
Spare parts and supplies................................. 49
-------
$10,075
-------

Based upon Hvide's policies, the vessels will be depreciated on a straight
line basis over 6 to 11 years and the drydocking costs will be amortized on a
straight line basis from the date purchased to the next required drydocking for
each vessel.

F-49
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and Shareholders
HVIDE MARINE INCORPORATED

We have audited the accompanying statements of assets to be sold of Gulf
Boat Marine Services, Inc. and E&D Boat Rentals, Inc. (the Companies) as of
September 30, 1994 and 1995, and the related statements of vessel operations for
the years then ended. These statements of assets to be sold and the related
statements of vessel operations are the responsibility of the management of the
Companies. Our responsibility is to express an opinion on the statements of
assets to be sold and the related statements of vessel operations based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements of assets to be sold and the
related statements of vessel operations are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statements of assets to be sold and the related statements of
vessel operations. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall presentation of the statements of assets to be sold and the related
statements of vessel operations. We believe that our audits provide a reasonable
basis for our opinion.

As described in Note 1, the statements of assets to be sold and the related
statements of vessel operations referred to above have been prepared in
accordance with the Asset Purchase Agreement between the Companies and Hvide
Marine Incorporated dated January 15, 1996 for the sale of certain assets to
Hvide Marine Incorporated, and is not intended to be a complete presentation of
the Companies' assets, liabilities, revenue and expenses.

In our opinion, the statements of assets to be sold and the related
statements of vessel operations referred to above present fairly, in all
material respects, the assets to be sold of the Companies at September 30, 1994
and 1995, and its vessel operations for each of the years then ended, pursuant
to the Sale and Purchase Agreement described in Note 1, in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

New Orleans, Louisiana
February 1, 1996

F-50
<PAGE>
GULF BOAT MARINE SERVICES, INC. AND E&D BOAT RENTALS, INC.
STATEMENTS OF ASSETS TO BE SOLD
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1995 1995
(UNAUDITED)
<S> <C> <C> <C>
Vessels and improvements....................................... $8,864 $8,972 $8,999
Less accumulated depreciation.................................. 8,030 8,240 8,283
------ ------ ------------
$ 834 $ 732 $ 716
------ ------ ------------
------ ------ ------------
</TABLE>

See accompanying notes.

F-51
<PAGE>
GULF BOAT MARINE SERVICES, INC. AND E&D BOAT RENTALS, INC.
STATEMENTS OF VESSEL OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1994 1995 1994 1995
(UNAUDITED)
<S> <C> <C> <C> <C>
Charter hire revenue......................................... $3,095 $3,252 $797 $832

Operating expenses:
Crew payroll and benefits.................................. 1,137 1,113 276 276
Repairs, maintenance, fuel and supplies.................... 584 565 126 166
Insurance.................................................. 384 424 105 86
Depreciation............................................... 222 210 58 43
Other...................................................... 37 60 -- 26
------ ------ ---- ----
Total operating expenses..................................... 2,364 2,372 565 597
------ ------ ---- ----
Gross profit................................................. 731 880 232 235

Overhead expenses:
Salaries and benefits...................................... 308 290 74 91
Office expenses............................................ 46 53 17 21
Professional fees.......................................... 26 30 3 10
Other...................................................... 59 56 30 42
------ ------ ---- ----
Total overhead expenses...................................... 439 429 124 164
------ ------ ---- ----
Income from vessel operations................................ $ 292 $ 451 $108 $ 71
------ ------ ---- ----
------ ------ ---- ----
</TABLE>

See accompanying notes.

F-52
<PAGE>
GULF BOAT MARINE SERVICES, INC. AND E&D BOAT RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND 1995

1. BASIS OF PRESENTATION

Under the terms of an Asset Purchase Agreement (the Agreement) dated January
15, 1996, Gulf Boat Marine Services, Inc. and E&D Boat Rentals, Inc. (the
Companies) have agreed to sell eight crew boats to Hvide Marine Incorporated
(Hvide) for $3,350,000. On January 31, 1996, Hvide assigned its rights under the
terms of the Agreement to Lawrence Bedrosian (d/b/a Steel Style Marine C.C.F.
Fund) and the sale was completed.

The accompanying statements of assets to be sold presents the historical
cost and accumulated depreciation of these eight crew boats which were owned and
operated by the Companies.

The accompanying statements of vessel operations include the revenue,
operating expenses and overhead expenses directly related to the operations of
these eight crew boats. Items excluded are the revenue, operating expenses and
overhead expenses associated with the operations of six other crew boats not
being sold to Hvide, along with the Companies' interest income and expense, and
income taxes. Overhead expenses of the Companies were allocated based upon
revenue by crew boat.

The accompanying statements are not intended to be complete financial
statements of the Companies.

2. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Unaudited Interim Financial Statements

The unaudited statement of assets to be sold at December 31, 1995 and the
unaudited statements of vessel operations for the three months ended December
31, 1994 and 1995 and the notes thereto have been prepared in accordance with
generally accepted accounting principles for interim financial information. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair statement have been included. The
results of vessel operations are not necessarily indicative of the results which
can be expected for full years.

Operations

The principal operations of the Companies consist of short-term vessel time
charters of its crew boats. The crew boats are used primarily in the Gulf of
Mexico by operators drilling oil and gas wells. During the years ended September
30, 1994 and 1995, five major customers accounted for 91% and 88%, respectively,
of its charter hire revenue. During the years ending September 30, 1994 and
1995, there were five individual customers representing greater than 10% of
charter hire revenues, as follows:

1994 1995

34.1% 26.6%
12.5 23.9
14.2 13.9
13.5 13.8
13.9% 12.9%

Revenue

Revenue from time charters are earned and recognized on a daily basis.

Vessels and Improvements

Vessels and improvements are stated at cost less accumulated depreciation.
Depreciation is computed on the straight-line method over 5 years for
improvements and 12 to 24 years for vessels, the estimated useful life of the
assets. Major renewals and betterments are capitalized, while replacements,
maintenance, and repairs which do not improve or extend the life of the assets
are expensed.

F-53
<PAGE>
GULF BOAT MARINE SERVICES, INC. AND E&D BOAT RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
SEPTEMBER 30, 1994 AND 1995

3. RELATED PARTIES

The Companies are owned by four individuals. Total salaries for these
individuals for the years ended September 30, 1994 and 1995 were $311,000 and
$298,000, respectively. Approximately $178,000 and $170,000, respectively, of
these salaries are included in the accompanying 1994 and 1995 statements of
vessel operations. Total salaries for these individuals for the three months
ended December 31, 1994 and 1995 were $76,000 and $92,000, respectively.
Approximately $43,000 and $52,000, respectively, of these salaries are included
in the accompanying statements of vessel operations for the quarters ended
December 31, 1994 and 1995 (unaudited).

F-54
<PAGE>
GLOSSARY

The following is a set of definitions for shipping terms that are used
throughout this Prospectus:

American Bureau of Shipping (or "ABS"): a vessel classification society.

Bareboat Charter: the rental or lease of an empty ship, without crew, stores
or provisions; the charterer (lessee) has the responsibility of operating the
vessel as though it were his own.

Certificate of Financial Responsibility (Water Pollution) or "COFR": means a
certificate issued by the U.S. Coast Guard that evidences a vessel owner or
operator's compliance with the statutory requirement to provide evidence of the
financial ability to meet liability for discharges of oil and hazardous
substances under the federal Water Pollution Control Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, and OPA 90.

Classification Societies: classification societies hold records of the class
maintenance of each ship registered or classed with them; these records are
deposited for the personal and confidential information and guidance of the
owner of the vessel.

Crew Boat or Vessel: an offshore supply vessel generally employed to
transport crew and supplies between ports and offshore drilling or production
facilities.

Day Rate: the price paid under a bareboat charter for one day's operation.

Double Bottom: compartments at the bottom of a vessel between the skin of
the vessel and its inner compartments containing cargo tanks and machinery
spaces; double bottom spaces can be used as void spaces or as ballast, water, or
fuel tanks.

Double Hull: hull construction technique by which a ship has an inner and
outer hull separated by void space, usually several feet in width.

Drydocking: the process by which a vessel is taken out of the water to
accomplish underwater repairs.

DWT: deadweight ton; a measurement of the carrying capacity of a vessel,
generally equal to the difference between the amount of water displaced by the
unloaded vessel and that displaced by the fully loaded vessel.

Escort Tug: a tugboat employed as an escort for a larger vessel usually in
dangerous or constricted waters.

Gross Ton: enclosed space of a ship measured in cubic feet divided by 100;
thus 100 cubic feet of such capacity is equivalent to one gross ton.

Integrated Tug/Barge or "ITB": a large barge integrated from the stern onto
the bow of a tug constructed to push the barge.

ISO 9002: one of three generic standards for quality management and quality
assurance intended to instill confidence in customers that a business will
provide satisfactory service on a consistent basis.

Jones Act: the portions of the federal Merchant Marine Act, 1920 restricting
U.S. domestic trade to U.S.-owned and constructed U.S.-flag vessels.

OPA 90: the federal Oil Pollution Act of 1990.

Supply Boat or Vessel: an offshore service vessel engaged in providing
supply services to the offshore energy industry.

A-1
<PAGE>
Time Charter: the hire of a fully operational ship for a specified period of
time; the shipowner provides the ship with crew, stores and provisions, ready in
all aspects to load cargo and proceed on a voyage as instructed by the
charterer. The charterer pays for fuel and all voyage-related expenses including
canal tolls and port charges.

Tractor Tug: a tugboat able to apply force in all directions which can
generally perform certain maneuvers more quickly and efficiently than
conventional tugs.

Utility Boat or Vessel: an offshore supply vessel generally employed to
transport crew and supplies between ports and offshore drilling or production
facilities.

Voyage Charter: contract of carriage in which the charterer pays for the use
of a ship's cargo capacity for one, or sometimes more than one, voyage; under
this type of charter, the shipowner pays all the operating costs of the ship
(including fuel, canal and port charges, pilotage, towage and ship's agency)
while payment for port and cargo handling charges are subject to agreement
between the parties; freight is generally paid per unit of cargo, such as a ton,
based on an agreed quantity, or as a lump sum irrespective of the quantity
loaded.

A-2
<PAGE>
Description of Picture:
The Seabulk California at an offshore location.

Caption:
One of the Company's 180-foot supply boats offloading drilling fluids, fuel, and
other supplies at an offshore Gulf of Mexico drilling location.

<PAGE>
================================================================================
- --------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH IN-FORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE UNDERWRITERS, OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

-------------------

TABLE OF CONTENTS

PAGE

Prospectus Summary.................... 3
Recent Developments................... 8
Risk Factors.......................... 8
The Company........................... 14
Use of Proceeds....................... 15
Dividend Policy....................... 15
Dilution.............................. 16
Capitalization........................ 17
Selected Historical and Pro Forma
Consolidated Financial Data........... 18
Management's Discussion and Analysis
of Results of Operations and
Financial Condition................. 20
Business.............................. 31
Management............................ 53
Certain Transactions.................. 60
Security Ownership of Principal
Stockholders and Management........... 63
Description of Certain Indebtedness... 65
Description of Capital Stock.......... 70
Shares Eligible for Future Sale....... 78
Underwriting.......................... 80
Legal Matters......................... 82
Experts............................... 82
Additional Information................ 82
Index to Financial Statements......... F-1
Glossary.............................. A-1

-------------------

UNTIL SEPTEMBER 3, 1996 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING) ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

7,000,000 SHARES

[LOGO]

HVIDE MARINE
INCORPORATED

CLASS A COMMON STOCK

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PROSPECTUS
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DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

HOWARD, WEIL, LABOUISSE,
FRIEDRICHS
INCORPORATED

AUGUST 8, 1996

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