##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, DC 20549
    
   Pre-Effective Amendment
    No. 1
 
 
 to
 
 Form S-1
  REGISTRATION
    STATEMENT
 UNDER
 THE SECURITIES ACT OF
    1933
      ORION MARINE GROUP,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

1600

26-0097459(State or other jurisdiction
    of
    incorporation or organization)

(Primary Standard Industrial
    Classification Code)

(I.R.S. Employer
    Identification Number)   12550 Fuqua
 Houston, Texas 77034
 (713) 852-6500
 (Address, including zip code,
    and telephone number,
 including area code, of
    Registrants principal executive officers)
  J. Michael Pearson
 President and Chief Executive
    Officer
 12550 Fuqua, Houston, Texas
    77034
 (713) 852-6500
 (Name, address, including zip
    code, and telephone number,
 including area code, of agent
    for service)
      Copies Requested
    to:
  Kyle K. Fox, Esq.
 Vinson & Elkins,
    LLP
 The Terrace 7
 2801 Via Fortuna,
    Suite 100
 Austin, Texas 78746
 Telephone:
    (512) 542-8539
 Fax:
    (512) 236-3340
      Approximate date of commencement of proposed sale to the
    public:
  þ
  o
  o
  o
  CALCULATION OF REGISTRATION
    FEE
  Proposed Maximum


Proposed Maximum


Amount ofTitle of Securities


Amount to be


Offering Price


Aggregate


Registrationto be Registered


Registered


per Share(1)


Offering Price


FeeCommon stock, par value $0.01 per share


20,949,196


$13.50


$282,814,146


$8,683  
  (1)
    
    Estimated solely for the purpose of
    calculating the registration fee under Rule 457(c) under
    the Securities Act. No exchange or over-the-counter-market
    exists for the registrants common stock; however, shares
    of the registrants common stock issued to qualified
    institution buyers, non-U.S. persons pursuant to
    Regulation S under the Securities Act and accredited
    investors in connection with its May 2007 private equity
    placement are eligible for the PORTAL
    Market®.
    The last sale of shares of the registrants common stock
    that was eligible for PORTAL, of which the registrant is aware,
    occurred on September 25, 2007 at a price of $14.05. 
  The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act or until the Registration Statement shall
    become effective on such date as the Commission, acting pursuant
    to said Section 8(a), may determine.




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The
information in this prospectus is not complete and may be
changed. These securities many not be sold until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.  SUBJECT TO
    COMPLETION, DATED AUGUST 20, 2007
  PROSPECTUS
  
  20,949,196 Shares
    Common Stock
         
   
    Investing in our common stock involves risks. You should
    read the section entitled Risk Factors beginning on
    page 10 for a discussion of certain risk factors that you
    should consider before investing in our common stock.
    Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.




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(IMAGE)




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NOTICE
    TO INVESTORS
  Restrictions
    on Foreign Ownership
  non-U.S. citizens.
  
    limit ownership by
    non-U.S. citizens
    of any class or series of our capital stock (including our
    common stock) to 23%;
    permit us to withhold dividends and suspend voting rights with
    respect to any shares held by
    non-U.S. citizens;
    permit us to establish and maintain a dual stock certificate
    system under which different forms of certificates may be used
    to reflect whether the owner is a U.S. citizen;
    permit us to redeem any shares held by
    non-U.S. citizens
    so that our foreign ownership is less than 23%; and
    permit us to take measures to ascertain ownership of our stock.  non-U.S. citizens
  MARKET
    DATA
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PROSPECTUS
    SUMMARY
  This summary highlights information contained elsewhere in
    this prospectus, but it does not contain all of the information
    that you may consider important in making your investment
    decision. Therefore, you should read the entire prospectus
    carefully, including, in particular, the Risk
    Factors section beginning on page 10 of this
    prospectus and the financial statements and related notes
    included elsewhere in this prospectus. As used in this
    prospectus, unless the context otherwise requires or indicates,
    references to Orion, the company,
    we, our, and us refer to
    Orion Marine Group, Inc. and its subsidiaries taken as a
    whole.
  About
    Orion
 
   
     
   
    
    increasing North American freight capacity / port and
    channel expansion and maintenance;
    deteriorating conditions of U.S. intracoastal waterways and
    bridges;
    historic federal transportation funding bill;
    robust cruise industry activity;
    continuing U.S. base realignment and closure program;
    strong oil and gas capital expenditures;
    ongoing U.S. coastal and wetland restoration and
    reclamation; and
    recurring hurricane restoration and repair.
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non-U.S. persons
  History
 2




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Competitive
    Strengths
    Breadth of Capabilities.
  Experienced Management Team.
 
  High Quality Fleet and Marine Maintenance
    Facilities.
 
    Financial Strength /Conservative Balance
    Sheet.
  Self-Performance of Contracts.
  Project Selection and Bidding
    Expertise.
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Strong Regional Presence.
  Growth
    Strategy
    Expand and Fill in Our Service
    Territory.
  Pursue Strategic Acquisitions.
 
  Continue to Capitalize on Favorable Long-Term Industry
    Trends.
 
  Continue to Enhance Our Operating
    Capabilities.
 4




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Risk
    Factors
    Corporate
    Information
 
  (713) 852-6500.
 5




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THE
    OFFERING
    Common stock offered by selling shareholders(1)
    
    20,949,196 sharesCommon stock outstanding after the offering
    
    21,565,324 sharesDividend policy
    
    We do not anticipate paying cash dividends on shares of our
    common stock for the foreseeable future.Use of proceeds
    
    We will not receive any of the proceeds from the sale of the
    shares of common stock by the selling shareholders. 
  Listing and Trading
    
    We intend to apply to list our common stock on the Nasdaq Global
    Market under the symbol OMGI. 
  Risk factors
    
    For a discussion of factors you should consider in making an
    investment, see Risk Factors beginning on
    page 10.    (1)
    
    See Selling Shareholders for more information on the
    selling shareholders. Currently represents all outstanding
    shares of our common stock except for 26,426 shares of our
    common stock granted to certain of our executive officers and
    key employees in May 2007 and 589,702 shares of our common
    stock granted to certain of our executive officers and key
    employees pursuant to our 2005 Stock Incentive Plan.
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SUMMARY
    CONSOLIDATED FINANCIAL DATA
 7




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Predecessor


SuccessorJanuary 1


October 14Year Ended


to


to


Year Ended


Six Months EndedDecember 31,


October 13


December 31,


December 31,


June 30,2002


2003


2004


2004


2005


2006


2006


2007(Unaudited)


(Unaudited)(In thousands, except for share and per share data)Statement of Operations
    Data:Contract revenues

$
106,793


$
101,369


$
97,989


$
32,570


$
167,315


$
183,278


$
82,124


$
89,772Cost of contract revenues


80,149



77,354



79,185



30,065



145,740



144,741



68,614



69,182Gross profit


26,644



24,015



18,804



2,505



21,575



38,537



13,510



20,590Selling, general and administrative
    expenses


15,478



16,376



7,752



1,611



10,685



18,225



5,840



11,368Operating income


11,166



7,639



11,052



894



10,890



20,312



7,670



9,222Interest expense, net


310



282



24



446



2,179



1,755



950



279Other (income) loss, net


(605
)


(1,030
)


(52
)


(237
)


(405
)


(886
)


(368
)


(20
)Income before income taxes


11,461



8,387



11,080



685



9,116



19,443



7,088



8,963Income tax expense


4,621



3,508



4,378



266



3,805



7,040



2,568



3,397Net income


6,840



4,879



6,702



419



5,311



12,403



4,520



5,566Preferred dividends














460



2,100



2,100



1,042



777Income (loss) available to common
    shareholders

$
6,840


$
4,879


$
6,702


$
(41
)

$
3,211


$
10,303


$
3,478


$
4,789Adjusted Per Common Share
    Data(2):Net income per shareBasic

$
74.35


$
50.25


$
69.02


$



$
0.20


$
0.65


$
0.22


$
0.28Diluted

$
74.35


$
50.25


$
69.02






$
0.20


$
0.63


$
0.21


$
0.27Weighted average shares outstandingBasic


92,000



97,100



97,100



15,695,067



15,706,960



15,872,360



15,777,884



17,254,063Diluted


92,000



97,100



97,100



15,695,067



16,135,211



16,407,250



16,383,194



17,990,674Other Financial Data:EBITDA(1)

$
17,550


$
15,318


$
16,544


$
3,091


$
22,331


$
33,003


$
13,832


$
15,562Capital expenditures


5,003



7,044



8,407



2,383



9,149



11,931



4,806



3,941Cash interest expense


325



282



150



263



2,146



3,453



1,218



820Depreciation and deferred financing
    cost amortization


5,779



6,649



5,440



1,960



11,036



11,805



5,794



6,320Net cash provided by operating
    activities


11,900



15,591



8,193



3,262



11,618



32,475



11,967



1,884Net cash (used in) investing
    activities


(14,273
)


(6,809
)


(6,634
)


(61,654
)


(5,431
)


(11,987
)


(4,578
)


(2,407
)Net cash provided by (used in)
    financing activities


4,682



(5,476
)


(1,055
)


66,094



(6,244
)


(9,572
)


(2,568
)


(2,103
)  
  Predecessor


SuccessorAs of December 31,


As of June 30,2002


2003


2004


2005


2006


2007(Unaudited)(In thousands)Balance Sheet Data:Cash and cash equivalents

$
5,114


$
8,420


$
7,701


$
7,645


$
18,561


$
15,935Working capital


6,478



7,775



11,475



14,729



12,970



23,096Total assets


54,448



53,711



113,739



114,626



125,072



123,138Total debt


11,556



5,965



40,489



34,548



25,000



3,095Total stockholders equity


27,045



32,039



35,419



40,730



53,239



78,877
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(1)
    
    For an explanation of EBITDA and a reconciliation of EBITDA to
    net income calculated and presented in accordance with generally
    accepted accounting principles, or GAAP, please see
     Non-GAAP Financial Measures. 
  (2)
    
    The share and per share financial data presented for successor
    periods have been adjusted to give effect to the 2.23 for one
    reverse split of our common stock that we effected on
    May 17, 2007 in connection with the 2007 Private Placement.
    The substantial difference in weighted average shares between
    the Predecessor and Successor Periods results from the
    acquisition of our company by our former principal stockholders. 
  Non-GAAP Financial
    Measures
    
    the financial performance of our assets without regard to
    financing methods, capital structure or historical cost basis;
    the ability of our assets to generate cash sufficient to pay
    interest costs and support our indebtedness;
    our operating performance and return on capital as compared to
    those of other companies in our industry, without regard to
    financing or capital structure; and
    the viability of acquisitions and capital expenditure projects
    and the overall rates of return on alternative investment
    opportunities.      Predecessor


SuccessorJanuary 1


October 14Year Ended


to


to


Year Ended


Six Months EndedDecember 31,


October 13


December 31,


December 31,


June 30,2002


2003


2004


2004


2005


2006


2006


2007(Unaudited)


(Unaudited)(In thousands)Net income

$
6,840


$
4,879


$
6,702


$
419


$
5,311


$
12,403


$
4,520


$
5,566Income tax expense


4,621



3,508



4,378



266



3,805



7,040



2,568



3,397Interest expense, net


310



282



24



446



2,179



1,755



950



279Deferred financing cost










24



41



171



171



86



92Depreciation and amortization


5,779



6,649



5,416



1,919



10,865



11,634



5,708



6,228EBITDA

$
17,550


$
15,318


$
16,544


$
3,091


$
22,331


$
33,003


$
13,832


$
15,562
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RISK
    FACTORS
 
  You should carefully consider each of the following risk
    factors and all of the other information set forth in this
    prospectus before deciding to invest in our common stock. If any
    of the following risks actually occur, our business, financial
    condition and results of operations could be harmed and we may
    not be able to achieve our goals. If that occurs, the value of
    our common stock could decline and you could lose some or all of
    your investment.
 
  Risk
    Factors Relating to Our Business
  We may be unable to obtain sufficient bonding capacity for
    our contracts and the need for performance and surety bonds may
    adversely affect our business.
    Our business depends on key customer relationships and our
    reputation in the heavy civil marine infrastructure market,
    which is developed and maintained by our key project managers.
    Loss of any of our relationships, reputation or key project
    managers would materially reduce our revenues and
    profits.
  project-by-project
  To be successful, we need to attract and retain qualified
    personnel, and any inability to do so would adversely affect our
    business.
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We could lose money if we fail to accurately estimate our
    costs or fail to execute within our cost estimates on
    fixed-price, lump-sum contracts.
  and/or
  
    failure to properly estimate costs of engineering, material,
    equipment or labor;
    unanticipated technical problems with the structures or services
    being supplied by us, which may require that we spend our own
    money to remedy the problem;
    project modifications creating unanticipated costs;
    changes in the costs of equipment, materials, labor or
    subcontractors;
    our suppliers or subcontractors failure to perform;
    difficulties in our customers obtaining required governmental
    permits or approvals;
    changes in local laws and regulations;
    delays caused by local weather conditions; and
    exacerbation of any one or more of these factors as projects
    grow in size and complexity.    We may incur higher costs to acquire, manufacture and
    maintain equipment necessary for our operations.
     11




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The timing of new contracts may result in unpredictable
    fluctuations in our cash flow and profitability. These factors
    as well as others that may cause our actual financial results to
    vary from any publicly disclosed earnings guidance and forecasts
    are outside of our control.
    We depend on continued federal, state and local government
    funding for marine infrastructure. A reduction in government
    funding for marine construction or maintenance contracts can
    materially reduce our results of operations.
    A significant portion of our business is based on
    government contracts. Our operating results may be adversely
    affected by the terms of the government contracts or our failure
    to comply with applicable terms.
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We derive a significant portion of our revenues from a
    small group of customers. The loss of one or more of these
    customers could negatively impact our business, operating
    results and financial condition.
      We may not be able to fully realize the revenue value
    reported in our backlog.
    Our business is subject to significant operating risks and
    hazards that could result in damage or destruction to persons or
    property, which could result in losses or liabilities to
    us.
      Our current insurance coverage may not be adequate, and we
    may not be able to obtain insurance at acceptable rates, or at
    all.
 
   
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Our employees are covered by federal laws that may provide
    seagoing employees remedies for job-related claims in addition
    to those provided by state laws.
   
   
  Many of our contracts have penalties for late
    completion.
  agreed-upon
  We may choose, or be required, to pay our suppliers and
    subcontractors even if our customers do not pay, or delay
    paying, us for the related services.
    We extend credit to customers for purchases of our
    services, and in the past we have had, and in the future we may
    have, difficulty collecting receivables from major customers
    that have filed bankruptcy or are otherwise experiencing
    financial difficulties.
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Our strategy of growing through strategic acquisitions may
    not be successful.
    
    difficulties in the integration of operations, systems, policies
    and procedures;
    enhancements in our controls and procedures including those
    necessary for a public company may make it more difficult to
    integrate operations and systems;
    failure to implement proper overall business controls, including
    those required to support our growth, resulting in inconsistent
    operating and financial practices at companies we acquire or
    have acquired;
    termination of relationships by the key personnel and customers
    of an acquired company;
    additional financial and accounting challenges and complexities
    in areas such as tax planning, treasury management, financial
    reporting and internal controls;
    the incurrence of environmental and other liabilities, including
    liabilities arising from the operation of an acquired business
    or asset prior to our acquisition for which we are not
    indemnified or for which the indemnity is inadequate;
    disruption of our ongoing business or receipt of insufficient
    management attention; and
    inability to realize the cost savings or other financial
    benefits that we anticipate.    The anticipated investment in port and marine
    infrastructure may not be as large as expected, which may result
    in periods of low demand for our services.
    Any adverse change to the economy or business environment
    in the regions in which we operate could significantly affect
    our operations, which would lead to lower revenues and reduced
    profitability.
    During the ordinary course of our business, we may become
    subject to lawsuits or indemnity claims, which could materially
    and adversely affect our business, operating results and
    financial condition.
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Our operations are subject to environmental laws and
    regulations that may expose us to significant costs and
    liabilities.
     16




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Our
    operations are susceptible to adverse weather conditions in our
    regions of operation.
    
    evacuation of personnel and curtailment of services;
    weather-related damage to our equipment, facilities and project
    work sites resulting in suspension of operations;
    inability to deliver materials to jobsites in accordance with
    contract schedules; and
    loss of productivity.  Our
    dependence on petroleum-based products could increase our costs
    which would adversely affect our business, operating results and
    financial condition.
    Terrorist
    attacks at port facilities could negatively impact the markets
    in which we operate.
    We may
    be subject to unionization, work stoppages, slowdowns or
    increased labor costs.
    We
    may be unable to sustain our historical revenue growth
    rate.
   17




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We
    are subject to risks related to our international
    operations.
    
    uncertainties concerning import and export license requirements,
    tariffs and other trade barriers;
    restrictions on repatriating foreign profits back to the U.S.;
    changes in foreign policies and regulatory requirements;
    difficulties in staffing and managing international operations;
    taxation issues;
    currency fluctuations; and
    political, cultural and economic uncertainties.    Restrictions
    on foreign ownership of our vessels could limit our ability to
    sell off any portion of our business or result in the forfeiture
    of our vessels or in our inability to continue our operations in
    U.S. navigable waters.
  non-U.S. citizens,
  Risk
    Factors Related to our Accounting, Financial Results and
    Financing Plans
  Actual
    results could differ from the estimates and assumptions that we
    use to prepare our financial statements.
   18




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Our
    use of the percentage-of-completion method of accounting could
    result in a reduction or reversal of previously recorded revenue
    and profit.
  81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts
  Failure
    to establish and maintain effective internal control over
    financial reporting could have a material adverse effect on our
    business, operating results and stock value.
  Form 10-K
 
   
  Once
    we become a public company, we will incur significant increased
    operating costs and our management will be required to devote
    substantial time to new compliance initiatives.
  ®
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Our
    bonding requirements may limit our ability to incur
    indebtedness.
    New
    accounting pronouncements including SFAS 123R may
    significantly impact our future operating results and earnings
    per share.
  Accounting for Stock Issued to
    Employees Share-Based Payment
   20




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Risks
    Related to this Offering and Our Common Stock
  There
    has been no public market for our common stock, we do not know
    if one will develop that will provide you with adequate
    liquidity, and following the completion of this offering, the
    trading price for our common stock may be volatile and could be
    subject to wide fluctuations.
 
   
 
   
  
    the number of shareholders;
    our operating performance and financial condition;
    the market for similar securities;
    the extent of coverage of us by securities or industry
    analysts; and
    the interest of securities dealers in making a market in the
    shares of our common stock.      
    actual or anticipated variations in our quarterly operating
    results;
    changes in our earnings estimates;
    publication of misleading or unfavorable research reports about
    us;
    increases in market interest rates, which may increase our cost
    of capital;
    changes in applicable laws or regulations, court rulings,
    enforcement and legal actions;
    changes in market valuations of similar companies;
    adverse market reaction to any increased indebtedness we incur
    in the future;
    additions or departures of key management personnel;
    actions by our shareholders;
    speculation in the press or investment community; and
    general market and economic conditions.  We
    do not anticipate paying any dividends on our common stock in
    the foreseeable future.
   21




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Our
    common stock is subject to restrictions on foreign
    ownership.
  U.S.-citizen
  You
    may experience dilution of your ownership interests if we issue
    additional shares of our common stock in the
    future.
    Future
    sales of our common stock may have an adverse effect on the
    price of our common stock.
  lock-up lock-up
  Provisions
    in our organizational documents and under Delaware law could
    delay or prevent a change in control of our company, which could
    adversely affect the price of our common stock.
   22




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SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
      
    our ability to obtain sufficient bonding capacity for our
    contracts;
    our ability to develop and maintain key customer relationships
    and our reputation in the heavy civil marine infrastructure
    market;
    our ability to attract and retain qualified personnel;
    failure to accurately estimate our costs or execute within our
    cost estimates or by the scheduled date for completion on fixed
    price, lump-sum contracts;
    increased costs to acquire, manufacture and maintain the
    equipment necessary for our operations;
    fluctuations in our cash flow and profitability due to the
    timing of new contracts;
    reductions in government funding for heavy civil marine
    infrastructure or maintenance contracts;
    failure to comply with applicable terms of the government
    contracts to which we are a party;
    loss of one or more of our significant customers;
    our ability to fully realize the revenue value reported in our
    backlog;
    significant operating risks and hazards that could result in
    damage or destruction to persons or property;
    failure to maintain adequate amounts of insurance coverage and
    inability to obtain additional amounts of insurance coverage;
    federal laws that may provide our employees with remedies for
    job-related claims in addition to those provided by state laws;
    potential penalties for late completion of contracts;
    our obligation to pay our suppliers and subcontractors even if
    our customers do not pay or delay paying us;
    difficulty in collecting receivables from major customers;
    risks inherent in acquisitions, including our ability to obtain
    financing for proposed acquisitions and to integrate and
    successfully operate acquired businesses;
    decrease in the anticipated investment in port and heavy civil
    marine infrastructure; 23




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
    adverse change to the economy or business environment in the
    regions in which we operate;
    adverse outcomes of pending claims or litigation or the
    possibility of new claims or litigation and the potential effect
    on our business, financial condition and results of operations;
    environmental laws and regulations applicable to our operations
    that may expose us to significant costs and liabilities;
    adverse impacts from weather affecting our performance and
    timeliness of completion, which could lead to increased costs
    and affect the costs or availability of, or delivery schedule
    for, equipment, components, materials, labor or subcontractors;
    increased costs
    and/or
    decreased supplies of petroleum-based products utilized to
    operate the equipment used in our construction contracts;
    terrorist attacks at port facilities where we operate;
    unionization, work stoppages, slowdowns or increased labor costs;
    our ability to sustain our historical revenue growth rate;
    risks inherent in international operations; and
    foreign ownership restrictions with respect to our vessels,
    which could limit our ability to sell off any portion of our
    business or result in the forfeiture of our vessels or in our
    inability to continue our operations in U.S. navigable
    waters. 24




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##### Table of Contents



USE
    OF PROCEEDS
    DIVIDEND
    POLICY
    CAPITALIZATION
    As of June 30, 2007(Unaudited)Cash and cash equivalents

$
15,935Total debt


3,095Stockholders equity:Common stock  par value $0.01 per share,
    50,000,000 shares authorized, 37,619,140 shares issued


376Treasury stock, 16,053,816 at cost


(201,555
)Additional paid-in capital


256,357Retained earnings


23,699Total stockholders equity


78,877Total capitalization

$
81,972   MARKET
    FOR COMMON STOCK
 
   
 
   
 25




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##### Table of Contents



SELECTED
    CONSOLIDATED FINANCIAL DATA
         26




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##### Table of Contents



Predecessor


SuccessorYear Ended


January 1 to


October 14 to


Year Ended


Six Months EndedDecember 31,


October 13


December 31,


December 31,


June 30,2002


2003


2004


2004


2005


2006


2006


2007(Unaudited)


(Unaudited)(In thousands, except for share and per share data)Statement of Operations
    Data:Contract revenues

$
106,793


$
101,369


$
97,989


$
32,570


$
167,315


$
183,278


$
82,124


$
89,772Cost of contract revenues


80,149



77,354



79,185



30,065



145,740



144,741



68,614



69,182Gross profit


26,644



24,015



18,804



2,505



21,575



38,537



13,510



20,590Selling, general and administrative
    expenses


15,478



16,376



7,752



1,611



10,685



18,225



5,840



11,368Operating income


11,166



7,639



11,052



894



10,890



20,312



7,670



9,222Interest expense, net


310



282



24



446



2,179



1,755



950



279Other (income) loss, net


(605
)


(1,030
)


(52
)


(237
)


(405
)


(886
)


(368
)


(20
)Income before income taxes


11,461



8,387



11,080



685



9,116



19,443



7,088



8,963Income tax expense


4,621



3,508



4,378



266



3,805



7,040



2,568



3,397Net income


6,840



4,879



6,702



419



5,311



12,403



4,520



5,566Preferred dividends














460



2,100



2,100



1,042



777Income (loss) available to common
    shareholders

$
6,840


$
4,879


$
6,702


$
(41
)

$
3,211


$
10,303


$
3,478


$
4,789Adjusted Per Common Share
    Data(2):Net income per shareBasic

$
74.35


$
50.25


$
69.02


$



$
0.20


$
0.65


$
0.22


$
0.28Diluted

$
74.35


$
50.25


$
69.02






$
0.20


$
0.63


$
0.21


$
0.27Weighted average shares outstandingBasic


92,000



97,100



97,100



15,695,067



15,706,960



15,872,360



15,777,884



17,254,063Diluted


92,000



97,100



97,100



15,695,067



16,135,211



16,407,250



16,383,194



17,990,674Other Financial Data:EBITDA(1)

$
17,550


$
15,318


$
16,544


$
3,091


$
22,331


$
33,003


$
13,832


$
15,562Capital expenditures


5,003



7,044



8,407



2,383



9,149



11,931



4,806



3,941Cash interest expense


325



282



150



263



2,146



3,453



1,218



820Depreciation and deferred financing
    cost amortization


5,779



6,649



5,440



1,960



11,036



11,805



5,794



6,320Net cash provided by operating
    activities


11,900



15,591



8,193



3,262



11,618



32,475



11,967



1,884Net cash (used in) investing
    activities


(14,273
)


(6,809
)


(6,634
)


(61,654
)


(5,431
)


(11,987
)


(4,578
)


(2,407
)Net cash provided by (used in)
    financing activities


4,682



(5,476
)


(1,055
)


66,094



(6,244
)


(9,572
)


(2,568
)


(2,103
)  
  Predecessor


SuccessorAs of December 31,


As of June 30,2002


2003


2004


2005


2006


2007(Unaudited)(In thousands)Balance Sheet Data:Cash and cash equivalents

$
5,114


$
8,420


$
7,701


$
7,645


$
18,561


$
15,935Working capital


6,478



7,775



11,475



14,729



12,970



23,096Total assets


54,448



53,711



113,739



114,626



125,072



123,138Total debt


11,556



5,965



40,489



34,548



25,000



3,095Total stockholders equity


27,045



32,039



35,419



40,730



53,239



78,877     (1)
    
    For an explanation of EBITDA and a reconciliation of EBITDA to
    net income calculated and presented in accordance with GAAP,
    please see Summary Consolidated Financial Data 
    Non-GAAP Financial Measures. 
  (2)
    
    The share and per share financial data presented for Successor
    periods have been adjusted to give effect to the 2.23 for one
    reverse split of our common stock that we effected on
    May 17, 2007 in connection with the 2007 Private Placement.
    The substantial difference in weighted average shares between
    the Predecessor and Successor periods results from the
    acquisition of our company by our former principal stockholders. 
 27




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##### Table of Contents



MANAGEMENTS
    DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  The following discussion and analysis of our financial
    condition and results of operations should be read in
    conjunction with Selected Consolidated Financial
    Data and our financial statements and related notes
    appearing elsewhere in this prospectus. Our actual results may
    differ materially from those anticipated in these
    forward-looking statements as a result of a variety of risks and
    uncertainties, including those described in this prospectus
    under Special Note Regarding Forward-Looking
    Statements and Risk Factors. We assume no
    obligation to update any of these forward-looking statements.
  Overview
        
    completeness and accuracy of the original bid;
    increases in commodity prices such as concrete, steel and fuel;
    customer delays and work stoppages due to weather and
    environmental restrictions;
    availability and skill level of workers; and
    a change in availability and proximity of equipment and
    materials.    Business
    Drivers and Measures
    Industry Trends.
  
    increasing North American freight capacity, which results in the
    need for port and channel expansion and maintenance;
    deteriorating condition of intracoastal waterways and bridges;
    the historic $286.0 billion federal transportation funding
    bill of 2005;
    robust demand in the cruise industry;
    the continuing U.S. base realignment and closure program
    (BRAC); 28




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##### Table of Contents




    strong oil and gas capital expenditures;
    ongoing U.S. coastal wetlands restoration and
    reclamation; and
    recurring hurricane restoration and repair; and
    the pending $14 billion federal water resources development
    funding bill of 2007.    Bidding.
     
  Utilization.
 
  Backlog.
   29




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##### Table of Contents



Revenue.
  Cost of Revenue. project-by-project
    General and Administrative
    Expenses.
  Other Factors.
  Seasonality.
 30




---



##### Table of Contents



Surety Bonding.
  Outlook.
  Significant
    Changes in Ownership
  2004 Acquisition.
  2007 Private Placement. non-U.S. persons
 31




---



##### Table of Contents



Critical
    Accounting Policies
    Revenue Recognition. 81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts.
    Long-Lived Assets. Accounting for the Impairment or
    Disposal of Long-Lived Assets,
 
   
 
  Goodwill. Goodwill and Other Intangible Assets.
 
 32




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##### Table of Contents



Income Taxes.
  Accounting for Uncertainty in Income Taxes
 
  Self-Insurance.
 
 
   
 
   
 
   
 33




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##### Table of Contents



Consolidated
    Results of Operations
  Six
    Months Ended June 30, 2006 Compared With Six Months Ended
    June 30, 2007
    
 Six Months Ended June 30,2006


2007Amount


Percent


Amount


Percent(Unaudited)


(Unaudited)(Dollars in thousands)Contract revenues

$
82,124



100.0
%

$
89,772



100.0
%Cost of contract revenues


68,614



83.5



69,182



77.1Gross profit


13,510



16.5



20,590



22.9Selling, general and
    administrative expenses


5,440



6.6



11,368



12.7Operating income


8,070



9.8



9,222



10.3Other (income) expenseInterest expense, net


950



1.2



279



0.3Other expense (income), net


32



0.0



(20
)


Other expense, net


982



1.2



259



0.3Income before income taxes


7,088



8.6



8,963



10.0Income tax expense


2,568



3.1



3,397



3.8Net income

$
4,520



5.5
%

$
5,566



6.2
%  
  Contract Revenues.
  Gross Profit.
 
  Selling, General and Administrative
    Expense.
 
 
  Other Expense, Net.
 
  Income Tax Expense.
 34




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##### Table of Contents



Year
    Ended December 31, 2005 Compared with December 31,
    2006
    
 Twelve Months Ended December 31,2005


2006Amount


Percent


Amount


Percent(Dollars in thousands)Contract revenues

$
167,315



100.0
%

$
183,278



100.0
%Cost of contract revenues


145,740



87.1



144,741



79.0Gross profit


21,575



12.9



38,537



21.0Selling, general and
    administrative expenses


10,685



6.4



17,425



9.5Operating income


10,890



6.5



21,112



11.5Other (income) expenseInterest expense, net


2,179



1.3



1,755



1.0Other (income) expense, net


(405
)


(0.2
)


(86
)


0.0Other expense, net


1,774



1.1



1,669



0.9Income before income taxes


9,116



5.4



19,443



10.6Income tax expense


3,805



2.3



7,040



3.8Net income

$
5,311



3.2
%

$
12,403



6.8
%  
  Contract Revenues.
  Gross Profit.
 
  Selling, General and Administrative
    Expense.
 
 
  Other Expense, Net.
 
  Income Tax Expense.
 35




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##### Table of Contents



Year
    Ended December 31, 2004 Compared with December 31,
    2005
  Business Combinations
  wrote-up write-up
    Predecessor


SuccessorJanuary 1


October 14


Combined


Successorthrough


through


Year Ended


Year EndedOctober 13,


December 31,


December 31, 2004


December 31, 20052004


2004


Amount


Percent


Amount


Percent(Dollars in thousandsContract revenues

$
97,989


$
32,570


$
130,559



100.0
%

$
167,315



100.0
%Costs of contract revenues


79,185



30,065



109,250



83.7
%


145,740



87.1
%Gross profit


18,804



2,505



21,309



16.3
%


21,575



12.9
%Selling, general and
    administrative expenses


7,752



1,611



9,363



7.2
%


10,685



6.4
%11,052



894



11,946



9.1
%


10,890



6.5
%Other (income) expenseInterest expense, net


24



446



470



0.4
%


2,179



1.3
%Other income


(52
)


(237
)


(289
)


(0.3
)%


(405
)


(0.2
)%Other (income) expense, net


(28
)


209



181



0.1
%


1,774



1.1
%Income before income taxes


11,080



685



11,765



9.0
%


9,116



5.4
%Income tax expense


4,378



266



4,644



3.6
%


3,805



2.3
%Net income

$
6,702


$
419


$
7,121



5.4
%

$
5,311



3.2
%   Contract Revenues.
  Gross Profit.
  Selling, General and Administrative
    Expense.
 36




---



##### Table of Contents



Other (Income) Expense, Net.
  Income Tax Expense.
  Liquidity
    and Capital Resources
        Year Ended


Six Months EndedDecember 31,


June 30,2004*


2005


2006


2006


2007(In thousands)Cash provided by (used in):Operating activities

$
3,262


$
11,618


$
32,475


$
11,967


$
1,884Investing activities


(61,654
)


(5,431
)


(11,987
)


(4,578
)


(2,407
)Financing activities


66,094



(6,244
)


(9,572
)


(2,568
)


(2,103
)Capital expenditures (included in
    investing
    activities above)


2,383



9,149



11,931



4,806



3,941     *
    
    represents the period from October 14 to December 31,
    2004 
  Operating Activities.
 
 37




---



##### Table of Contents



Investing Activities.
  Financing Activities.
  Sources
    of Capital
          Bonding
    Capacity
    Effect of
    Inflation
   38




---



##### Table of Contents



Off
    Balance Sheet Arrangements
    Contractual
    Obligations
    Payment Due by PeriodTotal


<1 Year


1-3 Years


3-5 Years


>5 Years(In thousands)Long-term debt obligations

$
3,095


$
3,095


$



$



$
Operating lease obligations


3,310



561



1,946



173



629Purchase obligations(1)


67



67











Total

$
6,471


$
3,723


$
1,946


$
173


$
629     (1)
    
    Purchase obligations include future cash payments pursuant to an
    outstanding licensing agreement for certain software.
    Commitments pursuant to other purchase orders and subcontracts
    related to construction contracts are not included since such
    amounts are expected to be funded under contract billings.      New
    Accounting Pronouncements
 
  Accounting for Uncertainty in Income
    Taxes.
 
  Fair Value
    Measurements
  The Fair Value Option
    for Financial Assets and Financial Liabilities
  Considering the Effects of Prior Year Misstatements
    when Quantifying Misstatements in Current Year Financial
    Statements
 39




---



##### Table of Contents



Quantitative
    and Qualitative Disclosures about Market Risk
      Related
    Party Transactions
       
   
 
   
 40




---



##### Table of Contents



fathers-in-law, daughters-in-law, sisters-in-law)
 
 
   
 
   
 41




---



##### Table of Contents



BUSINESS
  Our
    Business
       
   
  Industry Drivers

Representative CustomersIncreasing North American Freight Capacity /Port and Channel
    Expansion and Maintenance

Port of Houston, Tampa Port Authority, Port of Lake Charles,
    South Basin Development, Houston Cement, North Point Properties,
    Alcoa, The Haskell Company, Manatee County Port Authority, Port
    of BrownsvilleDeteriorating Condition of U.S. Intracoastal Waterways and
    Bridges

Corps of Engineers, Texas Department of Transportation
    (TXDOT), Florida Department of Transportation
    (FDOT), City of Tampa, City of St. PetersburgHistoric Federal Transportation Funding Bill

TXDOT, FDOT, Louisiana Department of Transportation &
    DevelopmentRobust Cruise Industry Activity

St. Lucia Air & Sea Port Authority, Ambergris Cay, Dominica
    Port Authority, Bahamas Marine, Port of Canaveral, Grand Turks
    Cruise Terminal, Carnival Cruise Lines, Port Authority of Cayman
    IslandsContinuing U.S. Base Realignment and Closure Program Strong Oil
    and Gas Capital Expenditures

U.S. Navy, Corps of Engineers
    Kinder Morgan, Shell Oil, ITC, Valero, Bahamas Oil Refining,
    Gulfterra, Esso, Teppco, Oiltanking, ExxonMobilOngoing U.S. Coastal and Wetlands Restoration and Reclamation

Federal, State and Local Agencies, City of Myrtle Beach, Corps
    of EngineersRecurring Hurricane Restoration and Repair

Federal Emergency Management Agency, U.S. Department of
    Agriculture, State Agencies and Private CompaniesThe Water Resources Development Act of 2007

Federal, State and Local Agencies  42




---



##### Table of Contents



non-U.S. persons
  History
   
   
  43




---



##### Table of Contents



Target/Acquisition Year

Strategic Rationale /DescriptionMid Gulf Industrial (now Orion
    Construction)  1997

   Established
    Texas Gulf Coast operating base   Full
    service specialty marine contractor serving Houston ship
    channel; founded in 1954King Fisher Marine  1998

   Established
    dredging capabilities on Texas Gulf Coast   Strength
    in pipeline construction; founded in 1940Inter-Bay Marine (now part of
    Misener Marine Construction)  2001)

   Established
    Florida Gulf Coast operating base   Founded in
    1962Misener Marine  2002

   Strengthened
    Florida operating base and enhanced Caribbean infrastructure
    expertise   Strong
    transportation/bridge contractor; founded in 1945     
    implementing stock based compensation;
    transitioning senior leadership;
    establishing standard bidding, project estimation, project
    controls and other operating systems, including expanding
    support personnel; and
    implementing scalable internal software systems.      Industry
    Overview
     44




---



##### Table of Contents



North American Freight Capacity /Port and Channel
    Expansion and Maintenance.
    
   Deteriorating Condition of U.S. Intracoastal
    Waterways and Bridges.
 45




---



##### Table of Contents



Federal Transportation Funding
    Bill.
  
    Texas is ranked as the number one state for construction
    spending on highways and bridges. The anticipated Texas
    allocation from SAFETEA-LU 2005 of approximately
    $14.5 billion from 2005 to 2009 reflects a 37% increase
    from the prior spending bill.
    Florida has experienced substantial population growth and
    requires significant spending to improve its transportation
    infrastructure. Florida also has the largest stretch of
    coastline of any state in the continental U.S., the area in
    which most of its population resides, increasing the need for
    coastal highway and bridge infrastructure. SAFETEA-LU
    2005s allocation for Florida is approximately
    $8.7 billion from 2005 to 2009, which reflects a 33%
    increase from the prior spending bill.
    The remaining states into which we have expanded or plan to
    expand our operations include Louisiana, Mississippi, Alabama,
    Georgia, South Carolina, North Carolina and Virginia. The
    allocation from SAFETEA-LU 2005 for these states is
    approximately $27.8 billion in the aggregate from 2005 to
    2009, reflecting a 30% increase from the prior spending bill.  Cruise Industry.
    U.S. Base Realignment and Closure Program
    (BRAC).
 46




---



##### Table of Contents



Oil and Gas Capital Expenditures.
    U.S. Coastal and Wetland Restoration and
    Reclamation.
    Hurricane Restoration and
    Repair.
  Water Resources Development Act of
    2007.
  Competitive
    Strengths
    Breadth of Capabilities.
 47




---



##### Table of Contents



Experienced Management Team.
  High Quality Fleet and Marine Maintenance
    Facilities.
  
    over 260 vessels of various sizes and capabilities,
    including 55 spud barges and material barges, and five major
    cutter suction dredges and three portable dredges, 49 tug boats
    and push boats;
    over 215 cranes and other large pieces of equipment, including
    48 crawler cranes and hydraulic cranes; and
    numerous pieces of smaller equipment.    Financial Strength /Conservative Balance
    Sheet.
  Self-Performance of Contracts.
  Project Selection and Bidding
    Expertise.
 48




---



##### Table of Contents



Strong Regional Presence.
  Growth
    Strategy
    Expand and Fill in Our Service
    Territory.
  
  Pursue Strategic Acquisitions.
 49




---



##### Table of Contents



Continue to Capitalize on Favorable Long-Term Industry
    Trends.
  Continue to Enhance Our Operating
    Capabilities.
  Services
 
   
  Marine Construction Services.
  Marine Transportation Facilities.
  
    public port facilities for container ship loading and unloading;
    cruise ship port facilities;
    private terminals;
    special-use Navy terminals; and
    recreational use marinas and docks.    Marine Pipeline Services.
  
    installing and removing of underwater buried pipeline
    transmission lines;
    installing pipeline intakes or outfalls for industrial
    facilities;
    constructing pipeline outfalls for wastewater and industrial
    discharge;
    performing river crossing and directional drilling;
    creating hot taps and tie-ins; and
    conducting inspection and repairs. 50




---



##### Table of Contents



Bridge and Causeway Construction.
  Marine Environmental Structures.
  
    installing concrete mattresses to ensure erosion protection;
    constructing levees to contain environmental mitigation
    projects; and
    installing geotubes for wetlands and island creation.  Specialty Services.
  Dredging Services.
  
    providing maintenance dredging for previously deepened waterways
    and harbors to remove silt, sand and other accumulated sediments;
    constructing breakwaters, jetties, canals and other marine
    structures;
    deepening ship channels and wharves to allow access to larger,
    deeper draft ships;
    containing erosion of wetlands and coastal marshes;
    conducting land reclamation;
    assisting in beach nourishment; and
    creating wildlife refuges.    Customers
   51




---



##### Table of Contents



2005


2006Revenue


Percent


Revenue


Percent(Dollars in thousands)Federal Government

$
28,214



16.9
%

$
43,682



23.8
%State Governments


40,990



24.5



29,172



15.9Local Municipalities


37,237



22.2



59,159



32.3Private Companies


60,874



36.4



51,265



28.0Total

$
167,315



100.0
%

$
183,278



100.0
%     Bidding
    Process
       52




---



##### Table of Contents



Contract
    Provisions and Independent Contractors
          Competition
    Bonding
   53




---



##### Table of Contents



Backlog
 
   
  Trade
    Names
    Equipment
    
    Barges  Spud barges, material barges,
    deck barges, anchor barges and fuel barges are used to provide
    work platforms for cranes and other equipment, to transport
    materials to the project site and to provide support for the
    project at the project site.
    Dayboats  Small pushboats, dredge
    tenders and skiffs are used to shift barges at the project site,
    to move personnel and to provide general support to the project
    site.
    Tugs  Larger pushboats and tug boats
    are used to transport barges and other support equipment to and
    from project site.
    Dredges  20 cutter head suction
    dredges (diesel/electric), 20 cutter head suction dredges
    (diesel), and 12 portable cutter head suction dredges are
    used to provide dredging service at the project site.
    Cranes  Crawler lattice boom cranes
    with lift capability from 50 tons to 250 tons and hydraulic
    rough terrain cranes with lift capability from 15 tons to 60
    tons are used to provide lifting and pile driving capabilities
    on the project site, and to provide bucket work, including
    mechanical dredging and dragline work, to the project site. 54




---



##### Table of Contents



Equipment
    Certification
    Properties
    
 Location

Type of Facility

Size

Leased or Owned

Expiration of Lease159 Highway 316 Port Lavaca, Texas

Waterfront maintenance and dock facilities, equipment yard and
    dry dock; regional office

17.5 acres

Owned

N/A17140 Market Street Channelview, Texas

Waterfront maintenance and dock facilities, and equipment yard

23.7 acres

Owned

N/A5600 West Commerce Street Tampa, Florida

Waterfront maintenance and dock facilities, equipment yard and
    dry dock; regional office

9.1 acres

Owned

N/A5121 Highway 90 East Lake Charles, Louisiana

Land based equipment yard and maintenance facility; regional
    office

8.9 acres

Leased

August 31, 2008, with 4 one-year extensions at our option6821 Southpoint Drive North Suite 221 Jacksonville, Florida

Regional office

1,152 square feet

Leased

September 30, 2007, renewable for 6-month intervalsCity of Port Lavaca Port Commission Port Lavaca, Texas

Safe Harbor

6.6 acres

Leased

March 31, 20121500 Main Street Ingleside, Texas

Regional office

4 acres

Leased

May 1, 20095440 W. Tyson Avenue
    Tampa, Florida 33611

Regional office

6,160 square feet

Leased

May 31, 2010  
    Training,
    Quality Assurance and Safety
   55




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##### Table of Contents



Risk
    Management and Insurance
   
 
 
   
 
   
 
   
 
   
   56




---



##### Table of Contents



Government
    Regulations
    
    regulations concerning workplace safety, labor relations and
    disadvantaged businesses;
    licensing requirements applicable to shipping and
    dredging; and
    permitting and inspection requirements applicable to marine
    construction projects.  and/or
  U.S.-citizen
  Environmental
    Matters
  General. and/or
 
   
  Waste Management.
 57




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##### Table of Contents



Site Remediation.
    Water Discharges. and/or
 
   
  Air Emissions.
   58




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##### Table of Contents



and/or Massachusetts, et al. v. EPA e.g.
  Endangered Species.
  Employees
    Legal
    Proceedings
   
  In
    re Canal Breaches Consolidation Litigation No. 05-4182, In re Canal Breaches
    Consolidation Litigation 05-4182, Order and Reasons,
 
 59




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##### Table of Contents



60




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##### Table of Contents



MANAGEMENT
  Directors
    Year First ElectedName

Age

Class(1)

or Appointed

Position with the CompanyJ. Michael Pearson


59


II


2006


President, Chief Executive Officer
    and Director,Thomas N. Amonett


63


I


2007


DirectorRichard L. Daerr, Jr.


63


II


2007


Chairman of the Board of DirectorsAustin J. Shanfelter


50


III


2007


DirectorGene Stoever


69


III


2007


Director     (1)
    
    Class I term expires in 2008; Class II term expires in
    2009; and Class III term expires in 2010.   
  J. Michael Pearson
 
  Thomas N. Amonett
 61




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##### Table of Contents



Richard L. Daerr, Jr.
 
  Austin J. Shanfelter
  Gene Stoever 32-year
  Executive
    Officers
    
 Name

Age

Position with the Company/SubsidiaryJ. Michael Pearson


59


President, Chief Executive Officer
    and Director,Mark R. Stauffer


45


Vice President and Chief Financial
    OfficerElliott J. Kennedy


53


Vice PresidentJames L. Rose


42


President  Misener
    Marine Construction, Inc.J. Cabell Acree, III


48


Vice President, General Counsel
    and Secretary  
    Mark R. Stauffer
  Elliott J. Kennedy
 62




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##### Table of Contents



James L. Rose
  J. Cabell Acree, III
  Board of
    Directors
        Code of
    Conduct
      
    engage in honest and ethical conduct, including the ethical
    handling of actual or apparent conflicts of interest;
    avoid conflicts of interest, including disclosure of any
    material transaction or relationship that reasonably could be
    expected to give rise to such a conflict;
    ensure that the disclosure in reports and documents that we file
    with the SEC and in our other public communications is full,
    fair, accurate, timely, and understandable; 63




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##### Table of Contents




    comply with applicable governmental laws, rules, and regulations;
    promptly report internally all violations of the Code of Conduct;
    deter wrongdoing; and
    promote accountability for adherence to the Code of Conduct.  Code of
    Ethics for Financial Employees
    
    act with honesty, integrity and in an ethical manner;
    promptly disclose to the chief legal officer, General Counsel or
    the board of directors, any material transaction or relationship
    that reasonably could be expected to give rise to a conflict of
    interest between such officers personal and professional
    relationships;
    respect and maintain the confidentiality of information acquired
    in the course of his or her work, except when authorized or
    otherwise legally obligated to disclose such information, and
    not use confidential information acquired in the course of his
    or her work for personal advantage;
    promote ethical behavior in the work environment;
    responsibly use and control all assets and resources employed by
    or entrusted to him or her;
    ensure that accounting entries are promptly and accurately
    recorded and properly documented and that no accounting entry
    intentionally distorts or disguises the true nature of any
    business transaction;
    prohibit the establishment of any undisclosed or unrecorded
    funds or assets for any purpose and provide for the proper and
    prompt recording of all disbursements of funds and all receipts;
    maintain books and records that fairly and accurately reflect
    our business transactions;
    devise, implement, maintain and monitor internal controls
    sufficient to assure that financial record-keeping objectives
    are met;
    comply with generally accepted accounting standards and
    practices, rules, regulations and controls;
    perform responsibilities with a view to causing our public
    communications, including periodic and other reports we file
    with the SEC, to be made on a timely basis with appropriate
    disclosures;
    sign only those reports and other documents, including filings
    with the SEC, that he or she believes to be accurate and
    truthful;
    not make, or tolerate to be made, false statements or entries
    for any purpose in our books and records or in any internal or
    external correspondence, memoranda or communication of any type,
    including telephone or electronic communications;
    comply, as appropriate and with the advice of counsel (as
    necessary), with rules, laws, and regulations of federal, state
    and local governments;
    not knowingly be a party to any illegal activity or engage in
    any act that will discredit his or her profession or us; and
    promptly report to the chief legal officer, General Counsel or
    the audit committee any situation where this Code of Ethics or
    any of our other policies or conduct codes, or any law
    applicable to us or our employees, is being violated. 64




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##### Table of Contents



Committees
    of the Board
    Audit Committee.
  
    to select the independent auditor to audit our annual financial
    statements;
    to approve the overall scope of and oversee the annual audit and
    any non-audit service;
    to assist management in monitoring the integrity of our
    financial statements, the independent auditors
    qualifications and independence, the performance of the
    independent auditor and our internal audit function and our
    compliance with legal and regulatory requirements;
    to discuss the annual audited financial and quarterly statements
    with management and the independent auditor;
    to discuss policies with respect to risk assessment and risk
    management; and
    to review with the independent auditor any audit problems or
    difficulties and managements responses.    http://www.orionmarinegroup.com.
  Compensation Committee.
  
    to develop an overall executive compensation philosophy,
    strategy and framework consistent with corporate objectives and
    stockholder interests;
    to review, approve and recommend all actions relating to
    compensation, promotion and employment-related arrangements for
    senior management, including severance arrangements;
    to approve incentive and bonus plans applicable to senior
    management and administer awards under incentive compensation
    and equity-based plans;
    to review and recommend major changes to and take administrative
    actions associated with any other forms of non-salary
    compensation; and
    to review and approve or recommend to the entire board for its
    approval, any transaction in our equity securities between us
    and any of our officers or directors subject to Section 16
    of the Securities Exchange Act of 1934.  http://www.orionmarinegroup.com.
  Nominating and Governance
    Committee.
 65




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##### Table of Contents



Compensation
    Committee Interlocks and Insider Participation
    Stockholder
    Communications
    Director
    Compensation
    
    Mr. Pearson, who is also our Chief Executive Officer, does
    not receive any separate compensation for his services as a
    member of our board of directors.
    We reimburse our directors for travel and lodging expenses in
    connection with their attendance at board and committee meetings.
    Our non-employee directors receive an annual retainer of $30,000
    and $1,000 for each regularly scheduled meeting attended and our
    chairman receives an additional annual retainer of $15,000. 
  
    In addition, each director who is a member of our audit
    committee receives an annual retainer fee of $7,000 and each
    director who is a member of any other committee receives an
    annual retainer fee of $5,000. The chairman of our audit
    committee receives an additional annual retainer fee of $10,000
    per year. 
  
    The board compensation package also provides for equity
    compensation for each non-employee director consisting of an
    option for 6,726 shares of our common stock. All option
    awards are nonqualified stock options and will be issued
    pursuant to our equity compensation plans in effect at the time
    of the award. The options vest 33% on the first anniversary of
    the grant date and
    1/36
    of the total award each month of continuous service thereafter.
    No compensation was paid to our directors in 2006.  Indemnification
   66




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##### Table of Contents



COMPENSATION
    DISCUSSION AND ANALYSIS
  The following compensation discussion and analysis contains
    statements regarding future individual and company performance
    measures, targets and other goals. These goals are disclosed in
    the limited context of our executive compensation program and
    should not be understood to be statements of managements
    expectations or estimates of results or other guidance. We
    specifically caution investors not to apply these statements to
    other contexts.
  Overview
    of Compensation Program
   
   
  Compensation
    Philosophy and Objectives
        
    Compensation levels should be sufficiently competitive to
    attract and retain key executives.  The
    compensation committee aims to ensure that our executive
    compensation program attracts, motivates and retains high
    performance talent and rewards them for our achieving and
    maintaining a competitive position in our industry. Total
    compensation (i.e., maximum achievable compensation)
    should increase with position and responsibility.
    Compensation should relate directly to performance, and
    incentive compensation should constitute a substantial portion
    of total compensation.  We aim to foster a
    pay-for-performance culture, with a significant portion of total
    compensation being at risk. Accordingly, a
    substantial portion of total compensation should be tied to and
    vary with our financial, operational and strategic performance,
    as well as individual performance. Executives with greater roles
    and the ability to directly impact our strategic goals and
    long-term results should bear a greater proportion of the risk
    if these goals and results are not achieved.
    Long-term incentive compensation should align
    executives interests with our
    stockholders.  Awards of equity-based
    compensation encourage executives to focus on our long-term
    growth and prospects and 67




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##### Table of Contents



incentivize executives to manage the company from the
    perspective of stockholders with a meaningful stake in us, as
    well as to focus on long-term career orientation.    
    attracting and retaining the most talented and dedicated
    executives possible;
    motivating and exhibiting leadership that aligns employees
    interests with that of our stockholders;
    developing and maintaining a profound and dynamic grasp of the
    competitive environment and positioning us as a competitive
    force within our industry;
    developing business models and systems that seek out strategic
    opportunities, which benefit us and our stockholders;
    implementing a culture of compliance and unwavering commitment
    to operating our business with the highest standards of
    professional conduct and compliance; and
    achieving accountability for performance by linking annual cash
    awards to the achievement of revenue, Net Cash Flow (defined as
    EBITDA less net capital expenditures) and individual performance
    objectives.  Role of
    Executive Officers in Compensation Decisions
     
   
  Determining
    Compensation Levels
    Elements
    of Compensation
    
    base salary; 68




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##### Table of Contents




    performance-based incentive compensation, including cash bonuses
    and long-term equity incentive compensation; and
    retirement and other benefits.  Base Salary.
 
   
  Performance-Based
    Incentive Compensation
  2006 Bonuses.
 
   
 
   
 69




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##### Table of Contents



,
      2007 Bonuses.
 
   
   70




---



##### Table of Contents



Percent of Target

Bonus AwardName

Net Cash Flow

AmountJ. Michael Pearson


90.0
%

$
75,000100.0



150,000125.0



506,250Mark R. Stauffer


75.0



55,000100.0



110,000125.0



371,250Elliott J. Kennedy


90.0



50,000100.0



100,000125.0



337,500James L. Rose


90.0



38,750100.0



77,500125.0



261,563  
   
 
   
 
   
 
 
  
 
   
 
   
  Transaction Bonus Agreements with Officers.
  Name

Cash Bonus


Common Stock


OptionsJ. Michael Pearson

$
1,000,000



18,519



44,844Mark R. Stauffer


750,000







44,844Elliott J. Kennedy


26,250



3,611



33,633James L. Rose


75,000







26,906All others (9 Persons), in
    the aggregate


292,000



4,296



179,369     Long-Term Incentive Compensation.
 71




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##### Table of Contents



i.e.
  Other Awards.
  Performance Awards.
    ,
  Retirement and Other
    Benefits.
     72




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##### Table of Contents



Employment
    Agreements, Severance Benefits and Change in Control
    Provisions
    Stock
    Ownership Guidelines
    Tax and
    Accounting Implications
      COMPENSATION
    COMMITTEE REPORT
        73




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##### Table of Contents



EXECUTIVE
    COMPENSATION
    SUMMARY
    COMPENSATION TABLE FOR FISCAL YEAR ENDED 2006
  Stock


Option


All OtherAwards


Awards


CompensationName and Principal Position

Year


Salary ($)


Bonus ($)


($)(2)


($)(3)


($)


Total ($)J. Michael Pearson


2006


$
202,884


$
840,973


$



$
52,800


$
14,058
(5)

$
1,110,715President and Chief
    Executive OfficerMark R. Stauffer


2006



199,423



770,427







9,900



6,772
(6)


986,522Chief Financial OfficerElliott J. Kennedy


2006



179,424



900,000
(4)










4,701
(6)


1,084,125Vice PresidentRussell B. Inserra(1)


2006



299,038



1,248,973







33,000



5,520
(6)


1,586,531Former Chairman of the Board and
    PresidentJames L. Rose


2006



131,779



91,100







9,900



184
(6)


232,963President  Misener
    Marine Construction, Inc.     (1)
    
    Mr. Inserra resigned as Chairman of the board and President
    effective as of November 1, 2006, but remained as one of
    our employees up until July 31, 2007 when his employment
    agreement expired.(2)
    
    On May 3, 2005, Messrs. Stauffer, Kennedy, Inserra,
    and Rose received awards of 123,319, 168,162, 336,323, and
    11,211 shares of restricted stock, respectively. These
    awards had a grant date fair value of $2,750, $3,750, $7,500,
    and $250, respectively. We recognized the full cost of these
    awards at the time of grant.(3)
    
    Amounts reflect the dollar amount recognized for financial
    statement reporting purposes for the year ended
    December 31, 2006, in accordance with FAS 123R, of
    awards of stock options under the 2005 Stock Incentive Plan.
    Assumptions used in the calculation of this amount are included
    in Note 13, Stock Based Compensation in the Notes to the
    Consolidated Financial Statements contained elsewhere in this
    prospectus.(4)
    
    Mr. Kennedy received $100,000 of his bonus in February
    2007. The remaining $800,000 will be paid to him at some point
    during the fourth quarter of 2007.(5)
    
    The amount reflects an automobile allowance provided to
    Mr. Pearson in the amount of $12,298, and our matching
    contributions to his account under our 401(k) Plan in the amount
    of $1,760.(6)
    
    The amounts reported reflect the value of the named executive
    officers personal use of a company automobile and, with
    the exception of Mr. Rose, our matching contributions to
    the named executive officers account under our 401(k) Plan. 74




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##### Table of Contents



GRANTS OF
    PLAN-BASED AWARDS FOR FISCAL YEAR ENDED 2006
    All Other





Grant DateOption Awards:





Fair ValueNumber of


Exercise or


of StockSecurities


Base Price


andUnderlying


of Option


OptionsOptions


Awards


AwardsName

Grant Date


(#)(1)


($/Sh)


($/Sh)(2)J. Michael Pearson


August 2, 2006



179,373


$
1.96


$
152,000Mark R. Stauffer


August 2, 2006



33,633



1.96



28,500Elliott J. Kennedy


August 2, 2006











Russell B. Inserra


August 2, 2006



112,108
(3)


1.96



95,000James L. Rose


August 2, 2006



33,633



1.96



28,500     (1)
    
    The option awards were issued under the 2005 Stock Incentive
    Plan. Provided the named executive officer remains continuously
    employed with us (or a parent or subsidiary of ours), the option
    awards (a) have vested with respect to one-fifth of the
    underlying shares on March 21, 2007, and (b) will vest
    with respect to one-sixtieth of the underlying shares upon the
    completion of each full month following March 21, 2007.(2)
    
    The amounts shown reflect the grant date fair value of the
    applicable option awards computed in accordance with
    FAS 123R.(3)
    
    Pursuant to the employment agreement we entered into with
    Mr. Inserra on March 27, 2007, Mr. Inserra agreed
    to forfeit 89,686 of the 112,108 options awarded to him on
    March 2, 2006. The remaining 22,422 options vested on
    March 21, 2007.  Employment
    Agreements
 
  Employment Agreements with Certain
    Officers.
 
       75




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##### Table of Contents



Employment Agreement with Russell B.
    Inserra.
  
    a weekly base salary equal to $5,770 for each week during the
    term of his agreement;
    the accelerated vesting of 213,004 shares of our common
    stock, which were part of the 336,323 shares granted to
    Mr. Inserra in 2005 under our 2005 Stock Incentive Plan;
    the vesting of options to acquire 22,422 shares of our
    common stock on March 31, 2007; and
    certain other perquisites specified in his employment agreement.  Stock
    Incentive Plans
 
  2005 Stock Incentive Plan.
 
    Restricted Stock.
  Stock Options.
 76




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##### Table of Contents



Long Term Incentive Plan.
    Shares Available.
  Eligibility.
  Administration. Rule 16b-3
  Terms of Options.
  Terms of SARs.
 77




---



##### Table of Contents



Restricted Stock Awards.
  Restricted Stock Units.
  Other Awards.
  Performance Awards.
 78




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##### Table of Contents



Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Number ofSecurities to be


Weighted


Number ofIssued Upon


Average Exercise


SecuritiesExercise of


Price of


RemainingOutstanding


Outstanding


Available forOptions


Options


Future IssuanceEquity compensation plans approved
    by security holders(1)


354,272


$
1.96



1,663,677Equity compensation plans not
    approved by security holders










Total


354,272


$
1.96



1,663,677     (1)
    
    Consists of the 2005 Stock Incentive Plan and the LTIP.  OUTSTANDING
    EQUITY AWARDS AT FISCAL YEAR END 2006
    Option Awards


Stock AwardsNumber of








Number of


MarketSecurities








Shares


ValueUnderlying








or Units of


of Shares orUnexercised


Option


Option


Stock That


Units of StockOptions (#)


Exercise


Expiration


Have Not


That Have NotName

Unexercisable(1)


Price ($)


Date


Vested (#)(2)


Vested ($)(3)J. Michael Pearson


179,373


$
1.96



8/2/16






$
Mark R. Stauffer


33,633



1.96



8/2/16



84,268



165,164Elliott J. Kennedy














114,910



225,224Russell B. Inserra


112,108
(4)


1.96



8/2/16



229,821
(5)


450,448
(5)James L. Rose


33,633



1.96



8/2/16



7,661



15,015     (1)
    
    The option awards were issued under the 2005 Stock Incentive
    Plan. Provided the named executive officer remains continuously
    employed with us (or a parent or subsidiary of ours), the option
    awards (a) have vested with respect to one-fifth of the
    underlying shares on March 21, 2007, and (b) will vest
    with respect to one-sixtieth of the underlying shares upon the
    completion of each full month following March 21, 2007.
    Notwithstanding, pursuant to the terms of a transaction bonus
    agreement entered into with each of Mr. Pearson and
    Mr. Stauffer effective as of April 2, 2007, as
    amended, their stock vested in full upon the consummation of the
    2007 Private Placement. The share numbers provided do not
    include option awards granted to our named executive officers
    upon consummation of the 2007 Private Placement.(2)
    
    On May 3, 2005, Messrs. Stauffer, Kennedy, Inserra,
    and Rose received awards of 123,319, 168,162, 336,323, and
    11,211 shares of restricted stock, respectively. The shares
    of restricted stock were issued under the 2005 Stock Incentive
    Plan. Provided the named executive officer remains continuously
    employed with us (or a parent or subsidiary of ours), the
    restricted stock will vest (or, as applicable, vested) as
    follows: (a) one-fifth of the restricted stock became
    vested on May 3, 2006, and (b) one-sixtieth of the
    restricted stock will vest (or, as applicable, vested) upon the
    completion of each full month following May 3, 2006.
    Notwithstanding, pursuant to the terms of a transaction bonus
    agreement entered into with each of Mr. Stauffer and
    Mr. Kennedy effective as of April 2, 2007, as amended,
    their stock vested in full upon the consummation of the 2007
    Private 79




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##### Table of Contents



Placement. The share numbers provided do not include option
    awards granted to our named executive officers upon consummation
    of the 2007 Private Placement.(3)
    
    The amounts provided equal the product of (a) the number of
    unvested shares of restricted stock and (b) $1.96, the
    amount determined by an independent third-party valuation firm
    to be the fair market value of a share of our common stock as of
    March 31, 2006. The March 31, 2006 valuation is our
    most recent valuation.(4)
    
    Pursuant to the employment agreement we entered into with
    Mr. Inserra on March 27, 2007, Mr. Inserra agreed
    to forfeit 89,686 of the 112,108 options awarded to him on
    March 2, 2006. The remaining 22,422 options vested on
    March 21, 2007.(5)
    
    Pursuant to the employment agreement we entered into with
    Mr. Inserra on March 27, 2007, all of his restricted
    stock vested in full upon the consummation of the 2007 Private
    Placement.  OPTION
    EXERCISES AND STOCK VESTED IN FISCAL YEAR ENDED 2006
    Stock AwardsNumber ofShares


ValueAcquired on


Realized onName

Vesting (#)


Vesting ($)(1)J. Michael Pearson





$
Mark R. Stauffer


39,051



76,540Elliott J. Kennedy


53,251



104,372Russell B. Inserra


106,502
(2)


208,744
(2)James L. Rose


3,550



6,958     (1)
    
    The amounts provided equal the product of (a) the number of
    shares of restricted stock that vested during 2006 and
    (b) $1.96, the amount determined by an independent
    third-party valuation firm to be the fair market value of a
    share of our common stock as of March 31, 2006. The
    March 31, 2006 valuation is the most recent valuation.(2)
    
    Pursuant to the employment agreement we entered into with
    Mr. Inserra on March 27, 2007, all of his restricted
    stock vested in full upon the consummation of the 2007 Private
    Placement.  Potential
    Payments Upon Termination or Change in Control
  J.
    Michael Pearson
  Stock Option Agreement.
    nolo contendere
 80




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##### Table of Contents



2007 Employment Agreement.
        12-month
 81




---



##### Table of Contents



nolo
    contendere
    Mark
    R. Stauffer
  Stock Option and Restricted Stock
    Agreements.
  2007 Employment Agreement.
      Elliot
    J. Kennedy
  Restricted Stock Agreement.
 82




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##### Table of Contents



2007 Employment Agreement.
      James
    L. Rose
  Stock Option and Restricted Stock
    Agreements.
  2007 Employment Agreement.
      J. Cabell
    Acree, III
  2007 Employment Agreement.
 83




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##### Table of Contents



84




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##### Table of Contents



SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
   
    
 Beneficial OwnershipAmount of


Percent ofCommon


CommonName of Beneficial Owner

Stock(1)


Stock(2)5% Stockholders:JANA Piranha Master Fund,
    Ltd.(3)(4)


1,500,000



6.96
%Bear, Stearns & Co.
    Inc.(3)(5)


1,488,458



6.90
%Directors and Executive
    Officers:(6)Richard L. Daerr, Jr.


2,000




*J. Michael Pearson(7)


197,892




*Mark R. Stauffer(8)


156,952




*Elliott J. Kennedy


171,773




*James L. Rose(9)


22,421




*Directors and Executive Officers
    as a group (5 persons)(10)


551,038



2.53
%  
    *
    
    Less than 1%. 
  (1)
    
    Includes shares that may be acquired within 60 days of
    September 30, 2007 by exercising vested stock options but
    does not include any unvested stock options. 
 
  (2)
    
    For each individual, this percentage is determined by assuming
    the named stockholder exercises all options which the
    stockholder has the right to acquire within 60 days of
    September 30, 2007, but that no other person exercises any
    options. 
 
  (3)
    
    Based on information furnished to us by the holder as of
    September 30, 2007. 
  (4)
    
    The shares held by Jana Piranha Master Fund, Ltd. are indirectly
    beneficially owned by Jana Partners LLC, a Delaware limited
    liability company and a private money management firm which
    holds its common stock in various accounts under its management
    and control. The principals of Jana Partners LLC are Barry
    Rosenstein and Gary Claar. Address: 200 Park Avenue,
    Suite 3800, New York, New York, 10166(5)
    
    Bear, Stearns & Co. Inc. is owned by The Bear Stearns
    Companies Inc., a publicly traded company that is listed on the
    New York Stock Exchange. Address: 383 Madison Avenue, New York,
    New York, 10179(6)
    
    Other than Richard L. Daerr, Jr. and J. Michael Pearson, none of
    our current directors have beneficial ownership of our common
    stock. 
  (7)
    
    Includes 179,373 shares Mr. Pearson could acquire
    within 60 days of September 30, 2007 by exercising
    vested stock options. 
 
  (8)
    
    Includes 33,633 shares Mr. Stauffer could acquire
    within 60 days of September 30, 2007 by exercising
    vested stock options. 
 
  (9)
    
    Includes 11,210 shares Mr. Rose could acquire within
    60 days of September 30, 2007 by exercising vested
    stock options. 
 
  (10)
    
    Includes (a) 179,373 shares Mr. Pearson could
    acquire within 60 days of September 30, 2007 by
    exercising vested stock options; (b) 33,633 shares
    Mr. Stauffer could acquire within 60 days of
    September 30, 2007 by exercising vested stock options; and
    (c) 11,210 shares Mr. Rose could acquire within
    60 days of September 30, 2007 by exercising vested
    stock options. 
 85




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##### Table of Contents



CERTAIN
    RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
       
  I-QUIP,
 
 
   
 
  fathers-in-law, daughters-in-law, sisters-in-law),
 
 
   
 
   
 86




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##### Table of Contents



SELLING
    SHAREHOLDERS
  non-U.S. persons
        
 Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedE.N. Investment Company


740,741



740,741Morgan Stanley & Co. Incorporated(2)


888,889



888,889One East Partners, L.P. (onshore)


866,667



866,667One East Duration Master, L.P.


244,444



244,444Plainfield Direct Inc.


750,000



750,000Drake Associates L.P.


30,000



30,000Triple Crown Investments LLP


25,000



25,000United Capital Management, Inc.


18,518



18,518The William K. Warren Foundation


30,000



30,000Cetus Capital, LLC


40,000



40,000Forest Hill Select Fund LP


254,445



254,445Calm Waters Partnership


74,074



74,074Third Point Partners Qualified L.P.


696,373



696,373Third Point Partners L.P.


785,108



785,108Clough Investment Partners I, LP


97,500



97,500Clough Offshore Fund, Ltd.


52,500



52,500Kenmont Special Opportunities Master
    Fund, L.P.


52,500



52,500 
 87




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedMan Mac Miesque IOB Ltd.


22,500



22,500Trust D


225,000



225,000LibertyView Funds, LP


95,370



95,370LibertyView Special Opportunities Fund, LP


74,074



74,074LibertyView Socially Responsible Fund, LP


37,037



37,037LibertyView Convertible Arbitrage Fund, LP


18,519



18,519Fort Mason Master, LP


76,067



76,067Fort Mason Partners, LP


4,933



4,933Kensico Partners, LP


212,400



212,400Kensico Associates, LP


287,600



287,600JP Morgan Securities, Inc.


370,370



370,370RMK Select High Income Fund(4)


86,600



86,600RMK High Income Fund(4)


38,100



38,100RMK Strategic Income Fund(4)


45,200



45,200RMK Advantage Income Fund(4)


51,400



51,400RMK Multi-Sector High Income Fund(4)


58,400



58,400Douglas H. Manuel & Gail D. Manuel JTWROS


5,555



5,555Douglas H. McCorkindale


7,407



7,407James A. Syme & Phyllis K. Syme JTWROS


3,333



3,333Steuart Investment Company


37,037



37,037Joseph H. Szymanski


5,555



5,555Stuckey Timberland, Inc.


11,111



11,111John Whalen and Linda D. Rabbitt, JTWROS


3,555



3,555Wiegers & Co. LLC


75,000



75,000Howard C. Bluver IRA R/O


1,851



1,851Sean Coleman


3,703



3,703Edward A. Fox


11,111



11,111Geddes and Company


18,518



18,518Georgetown Preparatory School, Inc.


7,417



7,417Harvard Investments, Inc.


14,814



14,814Michael F. Horn Sr. IRA


3,703



3,703Patrick J. Keeley


20,000



20,000Patrick McGinley and Shelley McGinley JTWROS


3,704



3,704Francis F. OConnor and Cynthia OConnor JTWROS


2,000



2,000James Matthew Varay


4,000



4,000Jay Weiss


7,407



7,407John C. York


4,000



4,000Thomas P. Gies and Lucy G. Gies JTWROS


3,704



3,704Christopher Ryan TTEE Article Fourth Tr U/W/O B. Ryan
    FBO Mary E. Ryan Credit Shelter U/A DTD 5/1/2006


5,000



5,000JAM Investments, LLC


5,555



5,555Cornell Capital Partners, L.P.


148,148



148,148Prism Partners III Leveraged L.P.


213,000



213,000 
 88




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedPrism Partners I, L.P.


87,000



87,000Charles H. Miller


5,000



5,000Terry P. Murphy Trustee of Terry P. Murphy Trust


1,481



1,481Steven J. Swain


800



800Reuven M. Sacher, MD


3,800



3,800Nancy L. Winton


700



700Laboratory Medical Associates, PA 401K FBO L. Zinterhofer


1,900



1,900Steven W. & Sheryl Kaplan Papish


500



500Pacific Partners LP


7,000



7,000Jane I. Schaefer Trust, Rudolph J. Schaefer, III, TTEE,
    Lauriston Castleman, Jr., TTEE


13,900



13,900Samuel P. Peabody


1,044



1,044Peter J. Spengler IRA Rollover


2,300



2,300Douglas L. Brown IRA Rollover


1,400



1,400Lawrence D. & Jane A. Sperling JTWROS


5,500



5,500Anthony J. Landi & Patricia Landi JTWROS


1,100



1,100Anthony J. Landi


500



500Patricia Landi


500



500Patricia Landi TTEE Revocable Trust Agreement FBO Patricia
    Landi


2,500



2,500Jacqueline Fowler


3,800



3,800Schaefer 2000 Trust, Jane I. Schaefer, Lauriston Castleman, Jr.,
    TTEE


800



800Rudolph & Jane Schaefer Charitable Trust, Lauriston
    Castleman, Jr., TTEE


500



500Martha H. Schaefer 1986 Trust, Lauriston Castleman, Jr., TTEE


1,700



1,700Lucia S. Chase 1986 Trust, Lauriston Castleman Jr., TTEE


1,700



1,700Rudolph J. Schaefer IV 1986 Trust, Lauriston Castleman Jr.,
    TTEE


1,700



1,700Greta J. Schaefer 1986 Trust, Lauriston Castleman Jr., TTEE


1,700



1,700Edmee S. Zahringer 1986 Trust, Lauriston Castleman Jr., TTEE


1,700



1,700Trust FBO John A. Berol u/w Kenneth Berrol


15,000



15,000Trust FBO David N. Berol u/w Kenneth Berrol


15,000



15,000Berol Family Trust FBO Margaret Beattle


15,000



15,000Arturo DePena


1,900



1,900Elizabeth Sexworth IRA Rollover


1,113



1,113Rajnikant R. Shah and Dilroza R. Shah Joint Tenants with Rights
    of Survivorship


7,407



7,407Felix Harke SEP-IRA


2,222



2,222Blue Ridge Investments


1,481



1,481Spring Point Partners, L.P.


27,200



27,200Spring Point Institutional Partners, L.P.


14,800



14,800Spring Point Special Situations Master
    Fund, L.P.


59,300



59,300Spring Point Offshore Master Fund, L.P.


60,900



60,900Spring Point Opportunity Master Fund, L.P.


297,678



297,678Advantage Advisors Catalyst Partners L.P.


10,000



10,000 
 89




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedRidgecrest Partners QP, L.P.


30,000



30,000Ambrosio Blanco


2,222



2,222Daryll Marshall-Inman SEP-IRA


2,222



2,222Brad Marshall-Inman SEP-IRA


2,222



2,222Michael Heijer IRA Rollover


2,222



2,222Forest Hill Select Offshore,
    Ltd.


189,999



189,999Friedman Billings Ramsey Group,
    Inc.


398,247



398,247FBR Capital Markets Corporation


398,247



398,247Alexandra P. Tumbleston


1,620



1,620Alexis Ann Shehata


1,260



1,260Alice F. Chernesky


2,340



2,340Andrea L. Kilian TTEE, Andrea L.
    Kilian Trust U/A DTD 09/25/1997


710



710Anita L. Rankin TTEE, Anita L.
    Rankin Rev. Trust U/A DTD 04/28/1995


540



540Ann C. Karter


10,450



10,450Ann K. Miller


9,850



9,850Anne-Marie Romer Trustee,
    Anne-Marie Romer Rev. Living Trust U/A DTD 02/08/2007


1,480



1,480Anthony L. Kremer, Charles
    Schwab & Co Inc Cust IRA Rollover


1,420



1,420Anthony L. Kremer TTEE, Anthony L.
    Kremer Rev. Living Trust U/A DTD 01/27/1998


1,020



1,020Baker Hazel Funeral Home,
    Inc.


340



340Barbara A. Muth, Charles
    Schwab & Co Inc Cust IRA Contributory


320



320Barbara A. Muth TTEE Barbara A.
    Muth Revocable Living U/A DTD 10/31/1996 FBO B Muth


1,550



1,550Beverly R. Guterman Charles
    Schwab & Co Inc Cust IRA Rollover


600



600Billy A. West TTEE Billy A West
    Trust U/A DTD 01/23/1992


4,340



4,340BLT Enterprises LLLP A Partnership


1,620



1,620Bradley J. Hausfeld Charles
    Schwab & Co Inc Cust IRA Rollover


870



870Brian Louis McMurray


1,700



1,700Carl William Goeckel Charles
    Schwab & Co Inc Cust SEP-IRA


2,440



2,440Carl William Goeckel Designated
    Bene Plan/TOD


340



340Charles L Bechtel &
    Miriam L Bechtel JTTEN


590



590Charles T Walsh TTEE The Charles T
    Walsh Trust U/A DTD 12/06/2000


3,600



3,600Charles V. Simms TTEE Charles V.
    Simms Trust U/A DTD 12/28/1994


1,400



1,400Cheryl Coleman Charles
    Schwab & Co Inc Cust IRA Rollover


340



340Chris H Kapolas & Linda
    Kapolas JTTEN


1,140



1,140Christine F. Lindeman Thomas
    Charles Schwab & Co Inc Cust IRA Rollover


1,080



1,080Christine F Lindeman Thomas Thomas
    Revocable Trust U/A DTD 08/22/1991


3,120



3,120Christopher M. Ruff Charles
    Schwab & Co Inc Cust IRA Rollover


280



280Cindy Ernst


13,050



13,050Craig Paul Sanford &
    Mary Jo Sanford JTTEN


6,390



6,390 
 90




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedCTBB Family Limited Partnership


4,380



4,380Cynthia A Hackett


2,350



2,350Cynthia J Crotty TTEE C/O Van Dyne
    Crotty Attn: Dave Senseman


3,310



3,310D Kremer & R Kremer TTEE
    David R Kremer Rev Living Tr U/A DTD 05/07/1996


1,730



1,730D MacCubbin & L
    MacCubbin TTEE Don A MacCubbin & Linda B Macc U/A DTD
    05/04/1993


2,110



2,110Daniel Ernest Neely Charles
    Schwab & Co Inc Cust Roth Contributory IRA


290



290Daniel J Roach Charles
    Schwab & Co Inc Cust IRA Rollover


580



580Daniel W Crotty TTEE C/O Van Dyne
    Crotty Attn: Dave Senseman


35,640



35,640David K Ray Charles
    Schwab & Co Inc Cust IRA Rollover


1,440



1,440David L Roer


340



340David M Gray TTEE David M Gray
    Revocable Trust U/A DTD 07/19/1996


440



440David M Morad Jr Charles
    Schwab & Co Inc.Cust IRA Rollover


4,620



4,620David R Ernst & Renee M
    Ernst JT TEN


3,160



3,160David Ross TTEE The David Ross
    Trust U/A DTD 11/04/2000


1,470



1,470David S Senseman TTEE David S
    Senseman Trust U/A DTD 10/18/1995


580



580David S. Senseman Trustee Crotty
    Escrow Trust U/A DTD 02/10/2006


2,010



2,010De Ette Rae Hart TTEE U/A DTD
    05/17/1999 FBO De Ette Rae Hart


820



820Deanne W. Joseph Charles
    Schwab & Co Inc Cust IRA Rollover


540



540Diana M Best Charles
    Schwab & Co Inc. Cust IRA Rollover


3,130



3,130Diane E Senseman TTEE Diane E
    Senseman Trust 10/18/1995 FBO D Senseman


570



570Diane W Colaizzi Charles
    Schwab & Co Inc Cust IRA Rollover


230



230Dina E Crnkovich Charles
    Schwab & Co Inc Cust IRA Rollover


1,360



1,360Don A Keasel IRA Rollover


1,120



1,120Don Aubrey MacCubbin Charles
    Schwab & Co Inc Cust IRA Contributory


580



580Donald A Porter Charles
    Schwab & Co Inc Cust IRA Contributory


1,260



1,260Donald G Tekamp TTEE Donald G
    Tekamp Revocable Trust U/A DTD 08/16/2000


1,240



1,240Donald Huu Nguyen & Lynn
    Ann Buffington JT TEN


1,010



1,010Donald Huu Nguyen Charles
    Schwab & Co Inc Cust IRA Rollover


210



210Donna G Dahm Charles
    Schwab & Co Inc Cust IRA Contributory


570



570Douglas A Marchal &
    Melissa K Marchal JT TEN


330



330EBS Microcap Partners LP A
    Partnership


20,610



20,610EBS Partners LP Primary Acct A
    Partnership


72,760



72,760Edward W Eppley Charles
    Schwab & Co Inc Cust IRA Rollover


820



820Eric Graham TTEE Eric A Grahm
    Trust DTD 02/11/2004


780



780Farouk Tabrah Charles
    Schwab & Co Inc Cust IRA Contributory


170



170Farouk Tabrah TTEE Tabrah
    Qualified Personal Residence Trust U/A 5/11/92


560



560Felice M Kantor TTEE Felice M
    Kantor Trust U/A DTD 06/23/1993


6,910



6,910 
 91




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedForney M Hoke III


2,360



2,360Found-MOR LLC


5,620



5,620Francis J Seiler Charles
    Schwab & Co Inc Cust IRA Rollover


470



470G Harmon & T
    Harmon & H Wall Lawrence J Harmon Trust A U/A DTD
    01/29/2001


580



580Gary M Youra Charles
    Schwab & Co Inc.Cust IRA Rollover


2,860



2,860George W Hicks


1,190



1,190George W Ledford Charles
    Schwab & Co Inc Cust IRA Rollover


3,250



3,250Gerald E Joseph & Deanne
    W Joseph JT TEN


1,590



1,590Gerald J Allen


3,420



3,420Gerald J Allen Charles
    Schwab & Co Inc Cust IRA Rollover


1,440



1,440Gregory Alan Reber &
    Bibi Ann Hazel-Reber JT TEN


800



800Gregory J Thomas Sep-IRA C/O TK
    Harris Commercial


540



540Gregory J Thomas TTEE
    Trust U/A DTD 08/22/91


760



760Gwendolyn D Harmon TTEE Gwendolyn
    D Harmon Trust U/A DTD 08/30/2001


2,640



2,640H Joseph Wood Charles
    Schwab & Co Inc Cust Spousal IRA Rollover


930



930Harold Allen Ferguson
    Jr & Lois Marie Ferguson JT TEN


1,480



1,480Hazel B Kidd


1,280



1,280Helen G Moody TTEE Helen G Moody
    Trust U/A DTD 01/17/2002


1,300



1,300Howard Smith


2,340



2,340Hsien Ming Meng Charles
    Schwab & Co Inc Cust IRA Rollover


690



690Industrial Grinding Inc. Profit
    Sharing Plan Trust Segregated Account


2,290



2,290J Ernst & D Ernst TTEE
    John C Ernst Rev Lt U/A DTD 11/11/1911


7,860



7,860Jack E Brady


380



380Jacqueline J Slyman


2,000



2,000Jacqueline Michelle Evans Charles
    Schwab & Co. Inc Cust IRA Rollover


310



310James A Broering Charles
    Schwab & Co Inc Cust IRA Rollover


4,800



4,800James N Marten TTEE James N Marten
    Revocable Trust U/A DTD 08/29/2001


2,190



2,190James Robert Goldstein


790



790James T Lehner Charles
    Schwab & Co Inc Cust IRA Rollover


2,100



2,100Jane Hughes TTEE Giacomo
    Irrevocable Trust U/A DTD 11/30/2000 FBO L Giaco


2,000



2,000Janet Rosemary Seiler TTEE Janet R
    Seiler Trust U/A DTD 05/18/2005


1,270



1,270Jean C Marten


730



730Jeannine E Phlipot


1,180



1,180Jeannine E Phlipot Charles
    Schwab & Co Inc. Cust IRA Contributory


1,020



1,020Jeffrey M Grieco TTEE Jeffrey M
    Grieco Rev Liv Trust U/A DTD 07/19/2001


1,230



1,230Jeffrey T Wood TTEE Revocable
    Trust Agreement U/A DTD 10/29/2003


1,330



1,330Jeffrey W Davis & Laura
    K Davis JT TEN


1,000



1,000Jennifer A Roer UTA Charles
    Schwab & Co Inc IRA Contributory Did 04/24/98


500



500 
 92




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedJennifer Roach


370



370Jennifer Roach Charles
    Schwab & Co Inc. Cust IRA Rollover


810



810Jerome E Muth Charles
    Schwab & Co Inc. Cust Roth Contributory IRA


3,030



3,030Jerome E Muth TTEE Trust U/A
    DTD 10/31/96 FBO Jerome E Muth


380



380Joan M Welsh TTEE A&R
    Agreement Of Trust For Joan M Welsh DTD 08/31/1990


1,280



1,280John A Barron


560



560John A Barron


690



690John A ONeil &
    Lisa D ONeil JT TEN


1,570



1,570John B Maynard Sr TTEE John B
    Maynard Sr Rev Liv Trust U/A DTD 10/05/1993


9,100



9,100John C Kunesh & Sarah L
    Kunesh JT TEN


1,170



1,170John Carl Eiting


5,500



5,500John Eubel Charles
    Schwab & Co Inc Cust IRA Rollover


4,280



4,280John M Walsh Jr Charles
    Schwab & Co Inc Cust IRA Rollover


1,360



1,360John OMeara Charles
    Schwab & Co Inc Cust IRA Rollover


340



340John Robert Scharf Charles
    Schwab & Co Inc Cust IRA Contributory


2,260



2,260John T Dahm Charles
    Schwab & Co Inc Cust IRA Contributory


3,040



3,040John T Dahm Charles
    Schwab & Co Inc Cust IRA Rollover


920



920John Thomas Paas & Julia
    Marie Paas JT TEN


690



690Jon Richard Yenor &
    Caroline Leutze Brecker JT TEN


1,060



1,060Jon Richard Yenor Charles
    Schwab & Co Inc Cust IRA Rollover


780



780Joseph D Maloney


1,210



1,210Joseph F Scullion Charles
    Schwab & Co Inc Cust IRA Rollover


1,010



1,010Joyce Ann Porter TTEE Joyce Ann
    Porter Trust U/A DTD 12/01/2000


920



920Juan M Palomar Charles
    Schwab & Co Inc Cust IRA Rollover


2,070



2,070Judith A Keasel IRA Rollover


460



460K Shelton Charles
    Schwab & Co Inc Cust IRA Rollover


1,130



1,130Kandythe J Miller


1,150



1,150Karen Ann Beach TTEE Karen A Beach
    Trust U/A DTD 05/25/2002


3,480



3,480Karen S Crotty TTEE Karen S Crotty
    Trust U/A DTD 06/13/1995


1,710



1,710Kathryn A Leeper TTEE Kathryn Ann
    Leeper Trust U/A DTD 06/29/95


710



710Keith T Lins Charles
    Schwab & Co In Cust IRA Rollover


1,020



1,020Kenneth M Fisher Charles
    Schwab & Co Inc Cust IRA Rollover


570



570Kenneth Michael Fisher &
    Alice Anne Fisher JT TEN


1,390



1,390Kevin M Crotty TTEE Kevin M Crotty
    Trust U/A DTD 06/13/1995


43,940



43,940Keybank National Association
    Custodian For Medamerica Health Systems Corp Other Board
    Designated Funds Eubel Brady & Sutton Asset Mgmt


14,880



14,880Kirby Charles Leeper Charles
    Schwab & Co Inc Cust IRA Rollover


1,080



1,080L Peck & D
    Vockell & S Brinn & O Fernandez TTEE
    Sharonville PED PSC 401 FBO O Fernandez


1,500



1,500Larry J Lehman Charles
    Schwab & Co Inc Cust IRA Rollover


1,410



1,410Lauren Peck Beneficiary Charles
    Schwab & Co Inc Cust Inherited IRA


1,150



1,150 
 93




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedLawrence K Jackson Charles
    Schwab & Co Inc Cust IRA Contributory


470



470Leo K Wingate &
    Katherine H Wingate JT TEN


860



860Linda Marie Meister


1,220



1,220Linda Marie Meister Charles
    Schwab & Co Inc Cust IRA Contrib DTD 03/31/2000


210



210M Brady & R Eubel TTEE
    EBS Asset Mgmt Inc PSP U/A DTD 01/01/1994


4,820



4,820M Demange & T Demange
    TTEE Mary J Demange Rev Living Tr U/A DTD 12/30/1992


400



400Marcia M ORourke


3,920



3,920Margaret Saunders Adam TTEE
    Margaret S Adam Revocable Trust U/A DTD 04/10/2002


590



590Mark Louis Orlandini


800



800Martha S Senkiw TTEE Martha S
    Senkiw Revoc Lvng Tru U/A DTD 11/02/1998


680



680Martin J Grunder Jr Charles
    Schwab & Co Inc Cust SEP-IRA


650



650Mary Ellen Kremer TTEE Mary Ellen
    Kremer U/A DTD 01/27/1998


1,320



1,320Mary Lou R Baggott


1,460



1,460Mary M Kunesh TTEE Charles T
    Kunesh Irrev Trust U/A DTD 06/28/1995


6,670



6,670Melinda Laureen Eubel UTA Charles
    Schwab & Co Inc IRA Rollover DTD 08/21/95


900



900Melodee A Ruffo


980



980Michael A Houser & H
    Stephen Wargo JT TEN


370



370Michael F Dakin Charles
    Schwab & Co Inc. Cust IRA Rollover


1,380



1,380Michael G Lunsford


420



420Michael G. Lunsford Charles
    Schwab & Co Inc. Cust IRA Rollover


890



890Michael Glenn Bradshaw Charles
    Schwab & Co Inc. Cust IRA Rollover


2,520



2,520Michael J McQuiston Charles
    Schwab & Co Inc Cust IRA Rollover


1,690



1,690Michael J Suttman


870



870Michael Lipson & Marilyn
    E Lipson JT TEN


390



390Michael Lipson Charles
    Schwab & Co Inc Cust IRA Contributory


260



260Michael Mathile Rev Tr


2,960



2,960Michael T Kunesh TTEE
    Trust Agreement U/A DTD 02/10/1995


2,510



2,510Michelle L Tagliamonte Charles
    Schwab & Co Inc Cust IRA Rollover


890



890Mike Joseph Evans &
    Jacke M Evans JT TEN


680



680Milo Noble


6,340



6,340Mlpf& S Cust FPO William R
    Brunner IRA FBO William R Brunner


1,230



1,230Najwa Tabrah Charles
    Schwab & Co Inc Cust IRA Contributory


580



580Nayann B Pazyniak Charles
    Schwab & Co Inc. Cust IRA Rollover


450



450Neal L Miller & Kandythe
    J Miller JT TEN


530



530Neal L Miller Charles
    Schwab & Co Inc. Cust IRA Rollover


230



230Neil Kantor Charles
    Schwab & Co Inc Cust IRA Rollover


3,160



3,160Neil W Hazel & Jeanne K
    Hazel JT TEN


780



780 
 94




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedNeil W Hazel TTEE Neil W Hazel
    Trust U/A DTD 08/25/92


1,220



1,220Norbert E Woodhams


14,330



14,330Northern Trust As Custodian
    For Upnorth Investments, Ltd  EBS


14,330



14,330Pamela S Graeser


360



360Parma Heights Investment Co A
    Partnership


460



460Patricia Meyer Dorn Designated
    Bene Plan/TOD


5,630



5,630Patrick A Mickley & Amy
    Jo Mickley JT TEN


460



460Patrick J Coleman Charles
    Schwab & Co Inc Cust IRA Rollover


1,860



1,860Patrick L McGohan &
    Jackie L McGohan JT TEN


1,350



1,350Paul J Routh Charles
    Schwab & Co Inc Cust IRA Contributory


660



660Paul R Crnkovich & Dina
    E Crnkovich JT TEN


3,640



3,640Paul R Crnkovich Charles
    Schwab & Co Inc Cust IRA Rollover


1,000



1,000Paul S Guthrie & Cynthia
    J Guthrie JT TEN


4,050



4,050Paul Strausbaugh & Joan
    Strausbaugh Ten/Com


1,760



1,760Peck Family Investments Ltd A
    Partnership


1,550



1,550Peck Investments LLC


2,220



2,220Peter D Senkiw TTEE Peter D Senkiw
    Rev Living Tr U/A DTD 11/02/1998


690



690Peter McInnes & Noreen
    McInnes Ten/Com


6,980



6,980Philip E Gallagher TTEE Philip E
    Gallagher DDS PSP DTD 12/31/1984 FBO P Gallagher


1,540



1,540Philip H Wagner TTEE Philip H
    Wagner Revocable Trus U/A DTD 11/01/2000


18,720



18,720Philip M Haisley Charles
    Schwab & Co Inc. Cust IRA Rollover


450



450R Kremer & D Kremer TTEE
    Ruth E Kremer Rev Living Tr U/A DTD 05/07/1996


1,190



1,190R&D Investment Partnership
    LLP A Partnership C/O Betty Eubel


22,180



22,180Rawa Ltd Partnership A Partnership


4,400



4,400Raymond W Lane


2,370



2,370Richard Dewey Smith


1,440



1,440Richard Dewey Smith Charles
    Schwab & Co Inc Cust IRA Contributory


330



330Richard E Holmes Charles
    Schwab & Co Inc Cust IRA Contributory


1,240



1,240Richard E Holmes TTEE Richard E
    Holmes Revocable Liv U/A DTD 08/25/1994


4,230



4,230Richard G Snider TTEE
    Baker-Hazel & Snider Funeral Home Inc U/A DTD
    06/01/2002


520



520Richard H Lesourd Jr C/O
    Lesourd & Co


1,750



1,750Richard N Kappel &
    Alicia L Kappel JT TEN


4,830



4,830Rick J Penwell TTEE Aviation Sales
    Inc 401k Plan U/A DTD 02/08/1994


1,480



1,480Robert A Colaizzi Jr Charles
    Schwab & Co Inc Cust IRA Rollover


2,660



2,660Robert A Weisman Charles
    Schwab & Co Inc Cust IRA Rollover


600



600Robert F Mays TTEE Robert F Mays
    Trust U/A DTD 12/07/1995


1,290



1,290Robert H Meixner Jr


9,280



9,280Robert L Kilian Charles
    Schwab & Co Inc Cust IRA Rollover


600



600 
 95




---



##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedRobert L Kiuan TTEE Robert L
    Kilian Trust U/A DTD 09/25/1997


1,100



1,100Robert N Sturwold Designated Bene
    Plan/TOD


740



740Robert S Crotty TTEE Brooke
    Caroline Crotty Trust U/A DTD 04/04/2006


1,090



1,090Robert S Crotty TTEE Robert S
    Crotty Trust U/A DTD 02/25/1996


22,230



22,230Roland J Anderson Charles
    Schwab & Co Inc Cust IRA Rollover


1,470



1,470Ruth D Scharf TTEE Ruth D Scharf
    Trust U/A DTD 12/06/1995


180



180S Miller & C Liesner
    TTEE Steven A Miller Living Trust U/A DTD 06/05/1998


2,770



2,770Samuel W Lumby TTEE Samuel W Lumby
    Trust U/A DTD 05/04/1995


1,650



1,650Sandra E Nischwitz


2,810



2,810Sean Robert Convery


450



450Semele Foundas Charles
    Schwab & Co Inc. Cust IRA Contributory


260



260Sherrie L Crotty TTEE Sherrie L
    Crotty Trust U/A DTD 04/04/2006


2,160



2,160Sonja K Kasch TTEE Sonja K Kasch
    Trust U/A DTD 10/26/2004


1,730



1,730Stanley H Rainey Jr Charles
    Schwab & Co Inc Cust IRA Rollover


2,510



2,510Stanley J Katz Charles
    Schwab & Co Inc Cust IRA Contributory


490



490Stephen A Delong


2,060



2,060Stephen L Hopf & Cynthia
    K Hopf JT TEN


880



880Steven E Ross & Mary J
    Ross JT TEN


10,140



10,140Steven K Suttman Charles
    Schwab & Co Inc. Cust IRA Rollover


700



700Steven M. Nelson Charles
    Schwab & Co Inc Cust IRA Rollover


1,690



1,690Steven R Conover &
    Victoria L Conover JT TEN


640



640Susan J Gagnon TTEE Susan J Gagnon
    Revocable Living U/A 08/30/1995


3,040



3,040T Anderson & J Anderson
    TTEE Anderson Family Rev Tr U/A DTD 09/23/2002


2,460



2,460T Demange & M Demange
    TTEE Thomas M Demange Rev. Living T


1,340



1,340Tanya H Pavlina TTEE
    Trust U/A DTD 11/21/95


1,650



1,650The Fifth Third Bank Successor
    Co-Trustee Under Agreement With George H. Welsh
    Tr B


3,960



3,960Thomas A Miller IRA Rollover


740



740Thomas Holton TTEE Marjorie G
    Kasch Irrev Trust U/A DTD 03/21/1980


970



970Thomas J Maio & Susan J
    Maio JT TEN


1,670



1,670Thomas J Mlinac TTEE Mazer
    Corporation PSP & 401(K) U/A DTD 11/30/66 FBO T Mlinac


1,000



1,000Thomas L Falvey & Mary
    Leslie Falvey JT TEN


2,160



2,160Thomas L Hausfeld Charles
    Schwab & Co Inc. Cust IRA Rollover


670



670Thomas V Moon & Moon
    Family Trust U/A DTD 10/14/91


950



950Timothy A Pazyniak Charles
    Schwab & Co Inc. Cust IRA Rollover


3,920



3,920Timothy Jon Beach TTEE Timothy J
    Beach Trust U/A DTD 04/22/2002


3,970



3,970Timothy M. Black Charles
    Schwab & Co Inc Cust IRA Rollover


810



810TNM Investments Ltd A Partnership


430



430Toby G Weber TTEE Toby G Weber Rev
    Mgmt Tr U/A DTD 06/13/2002


3,160



3,160 
 96




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##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedVerle McGillivray Charles Schwab & Co Inc Cust IRA
    Rollover


570



570Vivian D Bichsel TTEE Vivian D Bichsel Rev Liv Trust U/A
    DTD 11/18/1993


1,760



1,760Wilbur L Brown & Evilina A Brown JT TEN All Cap


5,410



5,410Wilbur L Brown & Evilina A Brown JT TEN Small Cap


620



620William I Gharst TTEE Jonell L Gharst Rev Liv Trust U/A DTD
    03/18/1997


3,320



3,320William J Turner TTEE William J Turner Revocable Living
    Trust DTD 05/20/1998


790



790William M Thornton Charles Schwab & Co Inc Cust IRA
    Rollover


4,290



4,290Yvonne Grieco TTEE Trust U/A DTD 07/19/2001


1,140



1,140JMB Capital Partners L.P.


726,000



726,000GLG North American Opportunity Fund


750,000



750,000Retail Employees Superannuation Trust(3)


65,400



65,400Australian Retirement Fund(3)


55,700



55,700Telstra Superannuation Scheme(3)


47,700



47,700Stichting Bedrijtstak Pensionefonds voor Het Vereepsvervoer Over
    De Weg(3)


39,200



39,200Maritime Life Discovery Fund(3)


25,400



25,400TELUS Foreign Equity Active Alpha Pool


19,300



19,300New Zealand Administration Services Limited  Global
    Equity Small Companies Pooled(3)


13,400



13,400TELUS Foreign Equity Active Beta Pool


9,300



9,300Richard S. Bodman Revocable Trust, dated 9/1/1998


6,507



6,507John M. Coleman and Patricia D. Coleman JTWROS


5,555



5,555CNF Investments II, LLC


18,519



18,519Timothy Michael Donahue and Jayne N. Donahue JTWROS


25,925



25,925Le Roy Eakin III and Lindsay Eakin, JTBE


7,407



7,407Gerhard Erdelji


740



740Joel Goozh and Karen Goozh TBE


3,703



3,703Chris Glubka


500



500Green Earth Investments LLC


11,111



11,111Wallace F. Holladay, Jr.


5,555



5,555Daniel H. Huthwaite and Constance Huthwaite JTWROS


3,703



3,703Evan Jones


7,407



7,407Thomas E. Lee and Nancy C. Lee JTWROS


3,703



3,703James Locke and Susan Locke TBE


18,518



18,518Fountainhead Special Value Fund


34,000



34,000King Investment Advisors, Inc. Profit Sharing Plan


1,600



1,600Charles O. Requadt and Julie K. Requadt


1,500



1,500E. Holt Williams, IRA Rollover


1,100



1,100Alford Turman


900



900Ryan McCleary


1,100



1,100 
 97




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##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedDale McCleary


4,000



4,000Roger E. King, separate property


7,400



7,400New York State Nurses Association Pension Plan(3)


53,300



53,300Seligman Global Smaller Companies Fund(3)


69,700



69,700Retirement Plan for Employees of Union Carbide Corporation and
    its Participating Subsidiary Companies(3)


81,300



81,300SEI Institutional Investments Trust  Small/Mid Cap
    Fund(3)


116,900



116,900The Robert Wood Johnson Foundation(3)


120,000



120,000SEI Institutional Investments Trust  Small Cap Fund(3)


136,100



136,100Dow Employees Pension Plan(3)


148,600



148,600Wellington Management Portfolios (Dublin)  Global
    Smaller Companies Equity Portfolio(3)


33,700



33,700Stichting Bedrijfstakpensionefunds voor de Media PNO(3)


50,000



50,000JBWere Global Small Companies Pooled Fund(3)


58,200



58,200SEI Institutional Managed Trust  Small Cap Growth
    Fund(3)


164,700



164,700Goldman Sachs JBWere Small Companies Pooled Fund(3)


241,100



241,100Public Sector Pension Investment Board(3)


243,500



243,500The Central States, Southeast and Southwest Areas Pension Fund(3)


158,500



158,500Oregon Public Employees Retirement Fund(3)


199,900



199,900Small/Mid Cap Diversified Alpha Fund(3)


10,300



10,300Radian Group Inc.(3)


28,100



28,100Wellington Trust Company, National Association Multiple
    Collective Investment Funds Trust, Emerging Companies
    Portfolio(3)


292,100



292,100JANA Piranha Master Fund, Ltd.


500,000



500,000Paulson Advantage Plus LP


138,059



138,059Paulson Advantage LP


101,483



101,483Bear Stearns & Co. Inc.


1,488,458



1,488,458Talvest Global Small Cap(3)


15,600



15,600The SEI U.S. Small Companies Fund(3)


23,500



23,500Paulson Advantage Ltd.


92,502



92,502Paulson Advantage Plus Ltd.


179,498



179,498AMP Enhanced Index International Share Fund


32,167



32,167Henderson North American Multi-Strategy Equity Fund


23,827



23,827Henderson Global Multi-Strategy Equity Fund


94,006



94,006Goldman Sachs Global Manager Strategies(3)


42,700



42,700Wellington Trust Company, National Association Multiple
    Common Trust Funds Trust, Smaller Companies Portfolio(3)


38,700



38,700Wellington Trust Company, National Association Multiple
    Common Trust Funds Trust, Emerging Companies Portfolio(3)


150,400



150,400Kensico Partners, LP


96,600



96,600Kensico Associates, LP


130,900



130,900Dornsife Trust


42,000



42,000Employees Retirement Account of C.R. Bard Inc.


20,000



20,000 
 98




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##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedPeninsula Catalyst Fund, L.P.


48,000



48,000Peninsula Catalyst Fund (QP), L.P.


102,000



102,000BSSC FBO J. Steven Emerson Roth IRA


100,000



100,000BSSC FBO J. Steven Emerson IRA R/O II


300,000



300,000Lisa and Joseph Nardini


1,852



1,852Ascend Partners Fund II LP


144,775



144,775Guggenheim Portfolio Co. XXIII LLC


105,225



105,225JANA Piranha Fund, LP


1,500,000



1,500,000One East Partners, L.P.


101,223



101,223Prides Capital Fund I, LP


348,870



348,870Talkot Fund, LP


96,900



96,900Bengard Roth IRA


5,000



5,000Higashi Farms


9,500



9,500Higashi Capital


2,000



2,000Higashi Trust


1,000



1,000Whittaker IRA


1,500



1,500Major Farms


4,000



4,000Lombardi IRA


3,500



3,500Keyhole Investors Partnership


5,500



5,500Dankmeyer IRA


4,000



4,000Perault Family Trust


2,500



2,500Sisters of Mercy


5,000



5,000Spain Family Trust


3,500



3,500Yu Family Trust


4,000



4,000Platsko Marital Trust


6,000



6,000Bohn Living Trust


4,000



4,000Ausonio Inc.


3,500



3,500Brooks Charitable Trust


1,200



1,200Mary Bonnie Brooks Trust


3,000



3,000Callahan Trust, CA, Trust


2,600



2,600Gronner Family Trust, CA, Trust


15,800



15,800Friedman, Billings, Ramsey & Co., Inc.


26,402



26,402Ridgecrest Partners QP, L.P.


19,000



19,000Banque Privee Edmond de Rothschild Europe


20,000



20,000Richard L. Daerr, Jr. (1)


2,000



2,000Timothy M. Black Charles Schwab & Co Inc Cust IRA
    Rollover


900



900Wood IRA, CA, Trust


4,600



4,600Gaver Family Trust


5,600



5,600Fran Gaver Simpson Trust


7,600



7,600Nicklaus Personal, CA, Personal Taxable


2,800



2,800Eckmann Foundation, CA, Trust


500



500Lawson, CA, Trust


2,400



2,400 
 99




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##### Table of Contents



Number of Shares ofCommon Stock Held


Number ofPrior to the


SharesSelling Shareholder

Offering


OfferedDenner, CA, Trust


4,900



4,900Newland Master Fund, Ltd.


27,000



27,000Alexandra Global Master Fund LTD


109,800



109,800The Central States, Southeast and Southwest Areas Pension Fund


4,000



4,000SEI Institutional Investments Trust Small Cap Fund


3,500



3,500SEI Institutional Managed Trust  Small Cap Growth Fund


4,500



4,500Small/Mid Cap Diversified Alpha Fund


2,700



2,700Jane Schaefer


500



500James T. McDonald TTEE, James T. McDonald U/A


4,280



4,280William E. York & Carrie E. York, JT TEN


1,760



1,760WTC CTF, Smaller Companies Portfolio


7,000



7,000Total


20,954,554



20,954,554  
   
  (1)
    
    Mr. Daerr serves on our board of directors. 
 
  (2)
    
    We have been advised that the selling shareholder is a member of
    FINRA. Any selling shareholder that is a broker-dealer may be
    deemed to be an underwriter with respect to the securities it
    sells pursuant to the prospectus. 
 
  (3)
    
    We have been advised that these accounts are managed by
    Wellington Management Company, LLP (Wellington).
    Wellington is an investment adviser registered under the
    Investment Advisers Act of 1940, as amended. Wellington, in such
    capacity, may be deemed to share beneficial ownership over the
    shares held by its client accounts. 
 
  (4)
    
    The parent company of the selling shareholders, Regions
    Financial, is a member of the FINRA. The selling shareholders
    have advised us that they purchased the shares in the ordinary
    course of business and, at the time of the purchase of the
    securities, it did not have any agreements or understandings,
    directly or indirectly, with any person to distribute the
    securities. 
 100




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##### Table of Contents



DESCRIPTION
    OF CAPITAL STOCK
 
   
  General
    Common
    Stock
    Voting Rights.
  Dividends.
  Liquidation.
  Fully Paid.
  Other Rights.
  Preferred
    Stock
      Liability
    and Indemnification of Officers, Directors and Certain
    Affiliates
   101




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##### Table of Contents




    for any breach of the directors duty of loyalty to us or
    our stockholders;
    for acts or omissions not in good faith or which involve
    intentional misconduct or a knowing violation of law;
    under Section 174 of the Delaware General Corporation Law
    relating to unlawful stock repurchases, redemptions or
    dividends; or
    for any transaction from which the director derives an improper
    personal benefit.            Anti-Takeover
    Effects of Provisions of Delaware Law, Our Certificate of
    Incorporation and Bylaws
   102




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##### Table of Contents



Delaware Anti-Takeover Statute.
  Charter
    and Bylaw Provisions
  Classified Board.
  Authorized But Unissued Shares.
  Filling Board of Directors Vacancies;
    Removal.
  No Cumulative Voting.
  Election of Directors.
  Advance Notice Requirement for Stockholder Proposals and
    Director Nominations.
 103




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##### Table of Contents



Amendments to our Certificate of Incorporation and
    Bylaws.
  No Stockholder Action by Written Consent; Special
    Meeting.
  Restrictions
    on Ownership
  Restrictions on Foreign
    Ownership. non-U.S. citizens.
  
    limits ownership by
    non-U.S. citizens
    of any class or series of our capital stock (including our
    common stock) to 23%;
    permits us to withhold dividends and suspend voting rights with
    respect to any shares held by
    non-U.S. citizens;
    permits a stock certification system with two types of
    certificates to aid tracking of ownership;
    permits us to redeem any shares held by
    non-U.S. citizens
    so that our foreign ownership is less than 23%; and
    permits us to take measures to ascertain ownership of our stock.  non-U.S. citizens
    Listing
 
   
  Transfer
    Agent and Registrar
   104




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##### Table of Contents



SHARES
    ELIGIBLE FOR FUTURE SALE
 
   
  lock-up
  Lock-Up
    Agreements
 
   
  
    offer, pledge, sell, contract to sell, sell any option or
    contract to purchase, purchase any option or contract to sell,
    grant any option, right or warrant for the sale of, lend or
    otherwise dispose of or transfer, directly or indirectly, any of
    our equity securities or any securities convertible into or
    exercisable or exchangeable for our equity securities, or file
    any registration statement under the Securities Act with respect
    to any of the foregoing; or
    enter into any swap or other arrangement that transfers to
    another, in whole or in part, directly or indirectly, any of the
    economic consequences of ownership of any of our equity
    securities, whether any such transaction described above is to
    be settled by delivery of shares of our common stock or such
    other securities, in cash or otherwise.   
  Lock-Up
 
  
    offer, pledge, sell, contract to sell, sell any option or
    contract to purchase, purchase any option or contract to sell,
    grant any option, right or warrant for the sale of, lend or
    otherwise dispose of or transfer, directly or indirectly, any of
    our equity securities or any securities convertible into or
    exercisable or exchangeable for our equity securities; or
    enter into any swap or other arrangement that transfers to
    another, in whole or in part, directly or indirectly, any of the
    economic consequences of ownership of any of our equity
    securities, whether any such transaction described above is to
    be settled by delivery of shares of our common stock or such
    other securities, in cash or otherwise. 105




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##### Table of Contents



Eligibility
    of Restricted Shares for Sale in the Public Market
  Rule 144.
  
    1.0% of the then outstanding shares of our common stock, or
    approximately 215,653 shares immediately after this
    offering; or
    the average weekly trading volume during the four calendar weeks
    preceding the date of which notice of the sale is filed on
    Form 144.    Rule 144(k).
 106




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##### Table of Contents



REGISTRATION
    RIGHTS
   
   
 
   
  
    compliance with the registration rights agreement;
    cutback rights on the part of the underwriters, provided that
    the holders of the registrable shares will be entitled to
    include shares comprising at least 25% of the total securities
    in the initial public offering proposed under the registration
    statement; and
    other conditions and limitations that may be imposed by the
    underwriters.     107




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##### Table of Contents



DESCRIPTION
    OF INDEBTEDNESS
  Credit
    Facility
      
    maintain a net worth, at all times, of not less than the sum of
    (a) $40.0 million plus (b) 50% of adjusted net
    income since December 31, 2006 plus (c) 75% of the net
    proceeds of equity issuances (other than the proceeds of this
    offering);
    maintain a ratio, as of any date, of (a) EBITDA (earnings
    before interest, taxes, depreciation, amortization and
    depletion) minus the greater of (y) the maintenance capital
    expenditures for such period or (z) $3.0 million to
    (b) the sum of (x) interest expense plus
    (y) scheduled principal payments for such period plus
    (z) the amount of all income and franchise taxes paid in
    cash during such period, of not less than 1.30 to 1.00; and
    maintain a ratio, as of the last day of each fiscal quarter, of
    (a) total debt to (b) EBITDA of not greater than 3.00
    to 1.00.   108




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##### Table of Contents



PLAN
    OF DISTRIBUTION
      
    directly by the selling shareholders and their successors, which
    include their donees, pledges or transferees or their
    successors-in-interest; or 
  
    through underwriters, broker-dealers or agents, who may receive
    compensation in the form of discounts, commissions or
    agents commissions from the selling shareholders or the
    purchasers of the common stock. These discounts, concessions or
    commissions may be in excess of those customary in the types of
    transactions involved but will not be greater than 8% for the
    sale of any securities being registered pursuant to
    SEC Rule 415. 
      
    fixed prices;
    prevailing market prices at the time of sale;
    prices related to such prevailing market prices;
    varying prices determined at the time of sale; or
    negotiated prices.    
    on any national securities exchange or quotation on which the
    common stock may be listed or quoted at the time of the sale;
    in the over-the-counter market;
    in transactions other than on such exchanges or services or in
    the over-the-counter market;
    through the writing of options (including the issuance by the
    selling shareholders of derivative securities), whether the
    options or such other derivative securities are listed on an
    options exchange or otherwise;
    through the settlement of short sales; or
    through any combination of the foregoing. 109




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##### Table of Contents




    engage in short sales of the common stock in the course of
    hedging their positions;
    sell the common stock short and deliver the common stock to
    close out short positions;
    loan or pledge the common stock to broker-dealers or other
    financial institutions that in turn may sell the common stock;
    enter into option or other transactions with broker-dealers or
    other financial institutions that require the delivery to the
    broker-dealer or other financial institution of the common
    stock, which the broker-dealer or other financial institution
    may resell under the prospectus; or
    enter into transactions in which a broker-dealer makes purchases
    as a principal for resale for its own account or through other
    types of transactions.   
   
  non-U.S. persons
       110




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##### Table of Contents



LEGAL
    MATTERS
    EXPERTS
    WHERE
    YOU CAN FIND MORE INFORMATION
  http://www.sec.gov. 1-800-SEC-0330
  http://www.orionmarinegroup.com,
 111




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##### Table of Contents



INDEX
    TO FINANCIAL STATEMENTS
  
 PageAnnual Audited Financial
    Statements:Report of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets as of December 31, 2006 and 2005


F-3Consolidated
    Statements of Income for the Years Ended December 31, 2006
    and 2005 (Successor) and for the Periods January 1, 2004
    through October 13, 2004 (Predecessor) and October 14,
    2004 through December 31, 2004 (Successor)


F-4Consolidated
    Statements of Stockholders Equity for the Period from
    Inception through December 31, 2004 and for the Years Ended
    December 31, 2005 and 2006


F-5Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2006 and 2005 (Successor) and for the Periods January 1,
    2004 through October 13, 2004 (Predecessor) and
    October 14, 2004 through December 31, 2004
    (Successor)


F-6Notes to
    Consolidated Financial Statements


F-7Interim Unaudited Financial
    StatementsConsolidated
    Balance Sheets as of June 30, 2007 and December 31,
    2006


F-24Consolidated
    Statements of Income for the Six Months Ended June 30, 2007
    and 2006


F-25Consolidated
    Statements of Stockholders Equity for the Six Months Ended
    June 30, 2007


F-26Consolidated
    Statements of Cash Flows for the Six Months Ended June 30,
    2007 and 2006


F-27Notes to
    Consolidated Financial Statements


F-28  
 F-1




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##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
                F-2




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Balance Sheets
  December 31,2006


2005(In thousands, except share and per share information)ASSETSCurrent assets:Cash and cash equivalents

$
18,561


$
7,645Accounts receivable:Trade, net of allowance of $500
    and $0, respectively


22,253



20,974Retainage


4,514



7,079Other


432



168Inventory


526



558Taxes receivable






914Deferred tax asset


559



188Costs and estimated earnings in
    excess of billings on uncompleted contracts


2,136



3,492Prepaid expenses and other


217



193Total current assets


49,198



41,211Accounts receivable 
    long term retainage


1,306



Property and equipment, net


71,334



69,914Goodwill


2,481



2,481Other assets


753



1,020Total assets

$
125,072


$
114,626LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt

$
5,810


$
4,565Accounts payable:Trade


6,099



9,660Retainage


1,114



970Related party


45



257Accrued liabilities


10,632



4,301Taxes payable


330



Billings in excess of costs and
    estimated earnings on uncompleted contracts


12,198



6,729Total current liabilities


36,228



26,482Long-term debt, less current
    portion


19,190



29,983Deferred income taxes


15,934



16,896Deferred revenue


481



535Total liabilities


71,833



73,896Commitments and contingenciesStockholders equity:Preferred stock 
    $0.01 par value, 35,000 shares authorized, issued and
    outstanding, $1,000 per share liquidation preference






Common stock 
    $0.01 par value, 50,000,000 shares authorized,
    16,730,942 shares issued


167



167Treasury Stock, 100,897 and
    0 shares at cost


(24
)


Additional paid-in capital


34,963



34,833Retained earnings


18,133



5,730Total stockholders equity


53,239



40,730Total liabilities and
    stockholders equity

$
125,072


$
114,626    F-3




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##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Statements of Income
  
 Successor


PredecessorOctober 14


January 1Year Ended


Year Ended


Through


ThroughDecember 31,


December 31,


December 31,


October 13,2006


2005


2004


2004(In thousands, except share and per share information)Contract revenues

$
183,278


$
167,315


$
32,570


$
97,989Costs of contract revenues


144,741



145,740



30,065



79,185Gross profit


38,537



21,575



2,505



18,804Selling, general and
    administrative expenses


17,425



10,685



1,611



7,75221,112



10,890



894



11,052Other (income) expenseInterest expense, net


1,755



2,179



446



24Other income


(86
)


(405
)


(237
)


(52
)Other expense (income), net


1,669



1,774



209



(28
)Income before income taxes


19,443



9,116



685



11,080Income tax expense


7,040



3,805



266



4,378Net income

$
12,403


$
5,311


$
419


$
6,702Net income

$
12,403


$
5,311


$
419


$
6,702Preferred dividends


2,100



2,100



460



Earnings available to common
    shareholders

$
10,303


$
3,211


$
(41
)

$
6,702Basic earnings per share

$
0.65


$
0.20


$
0.00


$
69.02Diluted earnings per share

$
0.63


$
0.20


$
0.00


$
69.02Shares used to compute earnings
    per share:Basic


15,872,360



15,706,960



15,695,067



97,100Diluted


16,407,250



16,135,211



15,695,067



97,100  
   F-4




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Statement of Stockholders Equity
  
 AdditionalPreferred Stock


Common Stock


Treasury Stock


Paid-In


RetainedShares


Amount


Shares


Amount


Shares


Amount


Capital


Earnings


Total(In thousands, except share information)PredecessorBalance, January 1, 2004










97,100



1











896



31,141



32,039Net Income






























6,702



6,702Balance, 10/13/2004










97,100



1











896



37,843



38,741SuccessorBalance at inception





$







$







$



$



$



$
Sale of stock


31,500







14,125,561















31,500







31,500Exchange of stock


3,500







1,569,507















3,500







3,500Net income






























419



419Balance, December 31, 2004


35,000







15,695,068















35,000



419



35,419Stock split














157











(157
)






Issuance of stock awards










1,035,874



10











(10
)






Net income






























5,311



5,311Balance, December 31, 2005


35,000







16,730,942



167











34,833



5,730



40,730Purchase of treasury stock


















(100,897
)


(24
)










(24
)Stock-based compensation


























130







130Net income






























12,403



12,403Balance, December 31, 2006


35,000


$




16,730,942


$
167



(100,897
)

$
(24
)

$
34,963


$
18,133


$
53,239  
   F-5




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Statements of Cash Flows
  Successor


PredecessorOctober 14


January 1Year Ended


Year Ended


Through


ThroughDecember 31,


December 31,


December 31,


October 13,2006


2005


2004


2004(In thousands)Cash flows from operating
    activities:Net income

$
12,403


$
5,311


$
419


$
6,702Adjustments to reconcile net income
    to net cash provided by operating activities:Depreciation and amortization


11,634



10,865



1,919



5,416Deferred financing cost amortization


171



171



41



24Non-cash interest expense


87



65



(7
)


7Bad debt expense


500











Deferred income taxes


1,333



(1,175
)


(193
)


(1,231
)Stock-based compensation


130











Loss (gain) on sale of property and
    equipment


(69
)


(642
)


80



(518
)Change in operating assets and
    liabilities:Accounts receivable


1,339



(8,151
)


3,179



(9,761
)Income tax receivable


914



(839
)


(75
)Inventory


32



(32
)






(259
)Prepaid expenses and other


(24
)


54



571



(379
)Costs and estimated earnings in
    excess of billings on uncompleted contracts


2,261



3,488



(517
)


(4,669
)Accounts payable


(5,248
)


1,076



7,022



(1,673
)Accrued liabilities


5,077



2,039



(1,445
)


3,237Income tax payable


330







335



1,403Billings in excess of costs and
    estimated earnings on uncompleted contracts


4,325



(1,147
)


(8,067
)


9,894Deferred revenue


(54
)


535







Net cash provided by operating
    activities


32,475



11,618



3,262



8,193Cash flows from investing
    activities:Proceeds from sale of property and
    equipment


438



3,718



625



1,773Purchase of property and equipment


(11,931
)


(9,149
)


(2,383
)


(8,407
)Acquisition of business (net of
    cash acquired)


(494
)






(59,896
)


Net cash used in investing
    activities


(11,987
)


(5,431
)


(61,654
)


(6,634
)Cash flows from financing
    activities:Proceeds from issuance of
    subsidiary preferred stock






3,513



31,500



1,000Repurchase of subsidiary preferred
    stock






(3,513
)






Borrowings on long-term debt










41,500



Payments for debt issue costs






(303
)


Net borrowings (repayments) under
    credit facility










(471
)


471Payments on long-term debt


(9,548
)


(5,941
)


(5,449
)


(2,526
)Purchase of treasury stock


(24
)










Payment of debt issuance costs










(986
)


Net cash (used in) provided by
    financing activities


(9,572
)


(6,244
)


66,094



(1,055
)Net change in cash and cash
    equivalents


10,916



(57
)


7,702



504Cash and cash equivalents at
    beginning of year


7,645



7,702







8,420Cash and cash equivalents at end of
    year

$
18,561


$
7,645


$
7,702


$
8,924Supplemental disclosures of cash
    flow information:cash paid during the year for:Interest

$
3,453


$
2,146


$
263


$
150Income taxes, net of refunds
    received


7,127



6,330



88



2,530    F-6




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2006 and 2005, and the Period
    from
 October 14, 2004 Through December 31, 2004 and the
    Period from
 January 1, 2004 Through October 13, 2004 for
 Orion Marine Group Holdings, Inc.
 (Dollars in 000s, except for share and per share
    amounts and as otherwise indicated)
  1.
    Summary
    of Significant Accounting Policies  Principle
    of Consolidation and Basis of Presentation
    Business Combinations
    Use of
    Estimates
 
   
 F-7




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Revenue
    Recognition
 
  81-1, Accounting for Performance of Construction  Type
    and Certain Production  Type Contracts
 
    Cash
    Equivalents
    Risk
    Concentrations
       F-8




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Revenue


%


A/R


%2006Federal Government

$
43,682



24
%

$
1,880



7
%State Governments


29,172



16



1,647



6Local Municipalities


59,159



32



13,426



48Private Companies


51,265



28



11,120



39$
183,278



100
%

$
28,073



100
%2005Federal Government

$
28,214



17
%

$
1,178



4
%State Governments


40,990



25



6,076



22Local Municipalities


37,237



22



8,549



30Private Companies


60,874



36



12,250



44$
167,315



100
%

$
28,053



100
%   Accounts
    Receivable
      Inventory
   F-9




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Income
    Taxes
  Accounting for Income Taxes
  Property
    and Equipment
 
   
 
   
  
 Automobiles and trucks

3 to 5 yearsBuilding and improvements

5 to 30 yearsConstruction equipment

3 to 15 yearsVessels and dredges

1 to 15 yearsOffice equipment

1 to 5 years  
 
   
  Accounting for the
    Impairment or Disposal of Long-lived Assets
 F-10




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Goodwill
    Fair
    Values of Financial Instruments
    Debt
    Issuance Costs
    Intangible
    Assets
    Self-Insurance
 
   
 
   
 F-11




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
   
 
   
  Stock-Based
    Compensation
  Share-Based Payment. Accounting for Stock
    Issued to Employees
    Recently
    Issued Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes Accounting for Income
    Taxes
  Fair Value
    Measurements
  The Fair Value Option
    for Financial Assets and Financial Liabilities
  Accounting for Planned Major Maintenance Activities
 F-12




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Elements of Financial Statements
  Considering the Effects of Prior Year Misstatements
    when Quantifying Misstatements in Current Year Financial
    Statements
  2.
    Property
    and Equipment    Useful lives(Years)


2006


2005Automobiles and trucks


3 to 5


$
2,956


$
3,807Building and improvements


5 to 30



11,734



10,979Construction equipment


3 to 15



74,282



68,999Dredges and dredging equipment


1 to 15



23,444



17,471Office equipment


1 to 5



796



218113,212



101,474Less: accumulated depreciation






(48,596
)


(38,508
)Net book value of depreciable
    assets






64,616



62,966Construction in progress






1,489



1,719Land






5,229



5,229$
71,334


$
69,914      F-13




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  3.
    Contracts
    in Progress    2006


2005Costs incurred on uncompleted
    contracts

$
180,421


$
128,025Estimated earnings


43,975



16,168224,396



144,193Less: Billings to date


(234,458
)


(147,430
)$
(10,062
)

$
(3,237
)Included in the accompanying
    consolidated balance sheet under the following captions:Costs and estimated earnings in
    excess of billings on uncompleted contracts

$
2,136


$
3,492Billings in excess of costs and
    estimated earnings on uncompleted contracts


(12,198
)


(6,729
)$
(10,062
)

$
(3,237
)     4.
    Accrued
    Liabilities    2006


2005Accrued salaries, wages and
    benefits

$
7,028


$
1,868Accrual for self insurance
    liabilities


1,954



1,084Accrued interest


21



419Warranty reserve


61



100Other accrued expenses


1,568



830$
10,632


$
4,301   5.
    Debt   F-14




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Year Ending December 31,

Amount2007

$
5,8102008


8,3002009


9,9602010


930$
25,000   6.
    Line of
    Credit       F-15




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  7.
    Income
    Taxes    Current


Deferred


TotalPredecessor:Period ended October 13, 2004:U.S. Federal


2,891



1,093


$
3,984State and local


256



138



394$
3,147


$
1,231


$
4,378Successor:Period October 14, 2004
    through December 31, 2004:U.S. Federal

$
145


$
134


$
279State and local


(72
)


59



(13
)$
73


$
193


$
266Period ended December 31,
    2005:U.S. Federal

$
1,946


$
1,290


$
3,236State and local


684



(115
)


569$
2,630


$
1,175


$
3,805Period ended December 31,
    2006:U.S. Federal

$
7,712


$
(1,096
)

$
6,616State and local


661



(237
)


424$
8,373


$
(1,333
)

$
7,040     Successor


PredecessorOctober 14,


January 1,Year Ended


Year Ended


Through


ThroughDecember 31,


December 31,


December 31,


October 13,2006


2005


2004


2004Tax provision at statutory U.S.
    federal income tax rate

$
6,805


$
3,099


$
233


$
3,767State income tax, net of federal
    income tax benefit


424



569



(13
)


394Permanent differences


(70
)


71



46



217Other


(119
)


66







Income tax provision

$
7,040


$
3,805


$
266


$
4,378  F-16




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,


December 31,2006


2005Net deferred tax (assets)
    liabilities:Accrued liabilities

$
(559
)

$
(188
)Depreciation and amortization


15,248



16,896Other


686



Total net deferred tax liabilities:

$
15,375


$
16,708As reported in the balance sheet:Net current deferred tax assets


(559
)


(188
)Net non-current deferred tax
    liabilities


15,934



16,896Total net deferred tax (assets)
    liabilities:

$
15,375


$
16,708     Accounting for
    Contingencies.
  8.
    Related
    Party Transaction     F-17




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Commitments
    and Contingencies  Operating
    Leases
        Year Ending December 31,

Amount2007

$
8412008


8092009


3312010


1702011


173Thereafter


629$
2,953   Litigation
    10.
    Employee
    Benefits    11.
    Earnings
    Per Share 
   
 F-18




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Earnings Per Share
    
 SuccessorOctober 14Year Ended


Year Ended


throughDecember 31,


December 31,


December 31,2006


2005


2004Basic EPS computation:Numerator:Net Income

$
12,403


$
5,311


$
419Preferred dividends


2,100



2,100



460Earnings available to common stockholders


10,303



3,211



(41
)Denominator:Total common shares  basic


15,872,360



15,706,960



15,695,067Basic EPS(1)

$
0.65


$
0.20


$
0.00Diluted EPS computation:Numerator:Earnings available to common stockholders

$
10,303


$
3,211


$
(41
)Denominator:Common shares


15,872,360



15,706,960



15,695,067Common share equivalents


534,892



428,251



Total common shares  diluted


16,407,250



16,135,211



15,695,067Diluted EPS

$
0.63


$
0.20


$
0.00  
   
  (1)
    Unvested shares of restricted stock are not included in this
    computation. 
  12.
    Acquisition   F-19




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Cash

$
3,606Accounts receivable


2,121Cost & profits in excess
    of billings


905Fixed assets


1,484Billings in excess of
    cost & profits


(1,144
)Liabilities assumed


(2,872
)$
4,100     Year EndedDecember 31,2005Contract revenues

$
184,665Income before income tax expense


8,586Net income


5,136Basic earnings per share


0.20Shares used in computing basic
    earnings per share


15,706,960Diluted earnings per share


0.20Shares used in computing diluted
    earnings per share


16,135,211   13.
    Stock-Based
    Compensation    Restricted
    Stock
   F-20




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    
 Weighted Average


Weighted Average


AggregateNumber of


Fair Value


Remaining Vesting


IntrinsicRestricted Stock

Shares


per Share


(Years)


ValueNonvested at January 1, 2005





$
Granted


1,035,874



0.02Vested


17,937



0.02Forfeited






Nonvested at December 31, 2005


1,017,937


$
0.02Granted






Vested


312,332



0.02Forfeited


(100,897
)


0.02Nonvested at December 31, 2006


604,708


$
0.02



4.3


$
1,173Vested at December 31, 2006 and expected to vest


923,242


$
0.02



4.3


$
1,791  
  Stock
    Options
      Weighted Average


Weighted Average


AggregateNumber of


Exercise Price


Contractual Life


IntrinsicStock Options

Shares


per Share


(Years)


ValueOutstanding at January 1, 2006






Granted


443,946


$
1.96Exercised






Forfeited






Outstanding at December 31, 2006


443,946


$
1.96



9.58


$
Vested at December 31, 2006 and expected to vest


435,067


$
1.96



9.58


$
Exercisable at December 31, 2006





$
1.96



9.58


$
      F-21




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  14.
    Stockholders
    Equity  Preferred
    Stock
    Stock
    Split
    Treasury
    Stock
   
  15.
    Enterprise
    Wide Disclosures 
 
   
 
   
  
 2006


%


2005


%


2004


%Federal

$
43,682



24
%


28,214



17
%


32,474



25
%State


29,172



16
%


40,990



25
%


30,252



23
%Local


59,159



32
%


37,237



22
%


16,334



13
%Private


51,265



28
%


60,874



36
%


51,499



39
%$
183,278



100
%

$
167,315



100
%

$
130,559



100
%  
 
   
 F-22




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
  Significant
    Customers
 
 
   
  
 2006


2005


2004*Customer A


23
%


13
%


23
%Customer B


15
%



**



**Customer C


10
%


13
%


11
%  
   
  *
    
    for comparability, 2004 combines the Predecessor and Successor
    periods 
 
  **
    
    represents less than 10% 
 
  16.
    Subsequent
    Events 
         F-23




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Balance Sheets
  June 30,


December 31,2007


2006(Unaudited)(In thousands, except share and per share information)ASSETSCurrent assets:Cash and cash equivalents

$
15,935


$
18,561Restricted cash


2,674



Accounts receivable:Trade, net of allowance of $500
    and $500, respectively


16,959



22,253Retainage


6,672



4,514Other


491



432Inventory


545



526Deferred tax asset


559



559Costs and estimated earnings in
    excess of billings on uncompleted contracts


7,212



2,136Prepaid expenses and other


948



217Total current assets


51,995



49,198Accounts receivable 
    long term retainage






1,306Property and equipment, net


67,921



71,334Goodwill


2,481



2,481Other assets


741



753Total assets

$
123,138


$
125,072LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt

$
3,095


$
5,810Accounts payable:Trade


4,333



6,099Retainage


901



1,114Related party






45Accrued liabilities


10,515



10,632Taxes payable


1,305



330Billings in excess of costs and
    estimated earnings on uncompleted contracts


8,750



12,198Total current liabilities


28,899



36,228Long-term debt, less current
    portion






19,190Deferred income taxes


14,908



15,934Deferred revenue


454



481Total liabilities


44,261



71,833Commitments and contingenciesStockholders equity:Preferred stock 
    $0.01 par value, 35,000 shares authorized, 0 and
    35,000 issued and outstanding, respectively, $1,000 per share
    liquidation preference






Common stock 
    $0.01 par value, 50,000,000 shares authorized,
    37,619,140 and 16,730,942 shares issued


376



167Treasury Stock, 16,053,816 and
    100,897 shares at cost


(201,555
)


(24
)Additional paid-in capital


256,357



34,963Retained earnings


23,699



18,133Total stockholders equity


78,877



53,239Total liabilities and
    stockholders equity

$
123,138


$
125,072    F-24




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Statements of Income
  
 Six Months


Six MonthsJune 30,


June 30,2007


2006(Unaudited)


(Unaudited)(In thousands, except share and per share information)Contract revenues

$
89,772


$
82,124Costs of contract revenues


69,182



68,614Gross profit


20,590



13,510Selling, general and
    administrative expenses


11,368



5,4409,222



8,070Other (income) expenseInterest expense, net


279



950Other (income) expense


(20
)


32Other expense, net


259



982Income before income taxes


8,963



7,088Income tax expense


3,397



2,568Net income

$
5,566


$
4,520Net income

$
5,566


$
4,520Preferred dividends


777



1,042Earnings available to common
    shareholders

$
4,789


$
3,478Basic earnings per
    share  Common

$
0.28


$
0.22Diluted earnings per
    share  Common

$
0.27


$
0.21Shares used to compute earnings
    per share:Basic  Common


17,254,063



15,777,884Diluted  Common


17,990,674



16,383,194  
   F-25




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Statement of Stockholders
    Equity
  AdditionalPreferred Stock


Common Stock


Treasury Stock


Paid-In


RetainedShares


Amount


Shares


Amount


Shares


Amount


Capital


Earnings


Total(In thousands, except share information)Balance, January 1, 2007


35,000


$




16,730,942


$
167



(100,897
)

$
(24
)

$
34,963


$
18,133


$
53,239Forfeited unvested restricted stock


















(8,969
)














Stock-based compensation


























147







147Liquidation of preferred stock stock


(35,000
)






















(40,431
)






(40,431
)Exercise of stock options










22,422















48







48Proceeds from sale of common stock,
    net










20,839,350



209



109,866



24



261,273







261,506Redemption of common shares


















(16,053,816
)


(201,555
)










(201,555
)Issuance of restricted stock










26,426















357







357Net income






























5,566



5,566Balance, June 30, 2007





$




37,619,140


$
376



(16,053,816
)

$
(201,555
)

$
256,357


$
23,699


$
78,877    F-26




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Consolidated Statements of Cash Flows
  
 Six Months


Six MonthsJune 30,


June 30,2007


2006(Unaudited)


(Unaudited)(In thousands)Cash flows from operating
    activities:Net income

$
5,566


$
4,520Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization


6,228



5,708Deferred financing cost
    amortization


92



86Non-cash interest expense


43



31Deferred income taxes


(1,026
)


(875
)Stock-based compensation


147



(Gain) loss on sale of property
    and equipment


(408
)


38Change in operating assets and
    liabilities:Accounts receivable


4,383



10,366Income tax receivable






Inventory


(19
)


(20
)Prepaid expenses and other


(731
)


6Costs and estimated earnings in
    excess of billings on uncompleted contracts


(5,076
)


(57
)Accounts payable


(2,024
)


(9,546
)Accrued liabilities


(2,791
)


412Income tax payable


975



Billings in excess of costs and
    estimated earnings on uncompleted contracts


(3,448
)


925Deferred revenue


(27
)


373Net cash provided by operating
    activities


1,884



11,967Cash flows from investing
    activities:Proceeds from sale of property and
    equipment


1,534



228Purchase of property and equipment


(3,941
)


(4,806
)Net cash used in investing
    activities


(2,407
)


(4,578
)Cash flows from financing
    activities:Payments on long-term debt


(21,905
)


(2,568
)Increase in loan costs


(123
)


Issuance of restricted stock


357



Exercise of stock options


48



Proceeds from sale of stock


262,641



Redemption of common stock and
    liquidation of preferred stock


(243,121
)


Net cash used in financing
    activities


(2,103
)


(2,568
)Net change in cash and cash
    equivalents


(2,626
)


4,821Cash and cash equivalents at
    beginning of period


18,561



7,645Cash and cash equivalents at end
    of period

$
15,935


$
12,466Supplemental disclosures of cash
    flow information: cash paid during the period for:Interest

$
820


$
1,218Taxes

$
3,864


$
2,867  
   F-27




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to Consolidated Financial Statements
 Six Months Ended June 30, 2007
 (Dollars in 000s, except for share and per share
    amounts and as otherwise indicated)
  1.
    Summary
    of Significant Accounting Policies  Principle
    of Consolidation and Basis of Presentation
          Use of
    Estimates
   F-28




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Revenue
    Recognition
 
  81-1, Accounting for Performance of Construction  Type
    and Certain Production  Type Contracts
 
    Cash
    Equivalents
    Risk
    Concentrations
         F-29




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    A/R


%June 30, 2007:Federal Government

$
1,942



8
%State Governments


1,755



7Local Municipalities


9,556



41Private Companies


10,377



44$
23,631



100
%December 31, 2006Federal Government

$
1,880



7
%State Governments


1,647



6Local Municipalities


13,426



48Private Companies


11,120



39$
28,073



100
%     Revenue


%Six months ended June 30,
    2007:Federal Government

$
15,469



17
%State Governments


7,133



8Local Municipalities


31,253



35Private Companies


35,917



40$
89,772



100
%Six months ended June 30,
    2006:Federal Government

$
21,673



26
%State Governments


17,657



22Local Municipalities


21,034



26Private Companies


21,760



26$
82,124



100
%   Accounts
    Receivable
   F-30




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Inventory
    Income
    Taxes
  Accounting for Income Taxes
  Accounting for Uncertainty in Income Taxes
  Property
    and Equipment
 
   
 F-31




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
   
  
 Automobiles and trucks


3 to 5 yearsBuilding and improvements


5 to 30 yearsConstruction equipment


3 to 15 yearsVessels and dredges


1 to 15 yearsOffice equipment


1 to 5 years  
 
   
  Accounting for the
    Impairment or Disposal of Long-lived Assets
  Goodwill
    Fair
    Values of Financial Instruments
    Debt
    Issuance Costs
   F-32




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Self-Insurance
 
   
 
   
 
   
 
   
  Stock-Based
    Compensation
  Share-Based Payment. Accounting for Stock
    Issued to Employees
    Recently
    Issued Accounting Pronouncements
  Fair Value
    Measurements
  The Fair Value Option
    for Financial Assets and Financial Liabilities
 F-33




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Accounting for Uncertainty in Income
    Taxes
  Considering the Effects of Prior Year Misstatements
    when Quantifying Misstatements in Current Year Financial
    Statements
  2.
    Property
    and Equipment    Useful lives


June 30,


December 31,(Years)


2007


2006Automobiles and trucks


3 to 5


$
2,632


$
2,956Building and improvements


5 to 30



11,734



11,734Construction equipment


3 to 15



74,265



74,282Dredges and dredging equipment


1 to 15



23,844



23,444Office equipment


1 to 5



845



796113,320



113,212Less: accumulated depreciation






(53,539
)


(48,596
)Net book value of depreciable
    assets






59,781



64,616Construction in progress






2,911



1,489Land






5,229



5,229$
67,921


$
71,334    F-34




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  3.
    Contracts
    in Progress    June 30,


December 31,2007


2006Costs incurred on uncompleted
    contracts

$
167,743


$
180,421Estimated earnings


38,269



43,975206,012



224,396Less: Billings to date


(207,550
)


(234,458
)$
(1,538
)

$
(10,062
)Included in the accompanying
    consolidated balance sheet under the following captions:Costs and estimated earnings in
    excess of billings on uncompleted contracts

$
7,212


$
2,136Billings in excess of costs and
    estimated earnings on uncompleted contracts


(8,750
)


(12,198
)$
(1,538
)

$
(10,062
)     4.
    Accrued
    Liabilities    June 30,


December 31,2007


2006Accrued salaries, wages and
    benefits

$
3,708


$
7,028Accrual for self-insurance
    liabilities


2,059



1,954Accrued interest


41



21Warranty reserve


61



61Due to related party (see
    Note 15)


2,674



Other accrued expenses


1,972



1,568$
10,515


$
10,632   5.
    Debt   F-35




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
            6.
    Line of
    Credit          7.
    Income
    Taxes    Current


Deferred


TotalSix months ended June 30,
    2007:U.S. Federal

$
4,073


$
(1,026
)

$
3,047State and local


350







350$
4,423


$
(1,026
)

$
3,397Six months ended June 30,
    2006:U.S. Federal

$
3,313


$
(875
)

$
2,438State and local


130







130$
3,443


$
(875
)

$
2,568  F-36




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Six Months


Six MonthsJune 30,


June 30,2007


2006Tax provision at statutory U.S.
    federal income tax rate

$
3,047


$
2,410State income tax, net of federal
    income tax benefit


350



130Other






28Income tax provision

$
3,397


$
2,568     June 30,


December 31,2007


2006Net deferred tax (assets)
    liabilities:Accrued liabilities

$
(559
)

$
(559
)Depreciation and amortization


14,908



15,248Other






686Total net deferred tax liabilities:

$
14,349


$
15,375As reported in the balance sheet:Net current deferred tax assets


(559
)


(559
)Net non-current deferred tax
    liabilities


14,908



15,934Total net deferred tax liabilities:

$
14,349


$
15,375     Accounting for
    Contingencies.
  Accounting for Uncertainty in Income
    Taxes
   F-37




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        8.
    Related
    Party Transaction      9.
    Commitments
    and Contingencies  Operating
    Leases
        AmountSix months ending
    December 31, 2007

$
561Year ending December 31, 2008


1,104Year ending December 31, 2009


635Year ending December 31, 2010


208Year ending December 31, 2011


173Thereafter


629$
3,310  F-38




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Litigation
    10.
    Employee
    Benefits    11.
    Earnings
    Per Share 
  Earnings Per Share
 
 
   
 F-39




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    
 Six Months


Six MonthsJune 30,


June 30,2007


2006Basic EPS computation:Numerator:Net Income

$
5,566


$
4,520Preferred dividends(1)


777



1,042Earnings available to common
    shareholders


4,789



3,478Denominator:Total common shares 
    basic


17,254,063



15,777,884Basic EPS(2)

$
0.28


$
0.22Diluted EPS computation:Numerator:Earnings available to common
    shareholders

$
4,789


$
3,478Denominator:Common shares


17,254,063



15,777,884Common share equivalents


736,611



605,310Total common shares 
    diluted


17,990,674



16,383,194Diluted EPS

$
0.27


$
0.21  
    (1)
    
    Upon any liquidation of the Company, holders of preferred shares
    would have received a liquidation preference of $1,000 per
    share, plus 6% cumulative dividends per year. Holders were not
    entitled to additional payment or distribution of the earnings,
    assets or surplus funds of the Company upon liquidation. The
    shares were converted into preferred stock, redeemed and retired
    in May 2007. See Note 15. 
  (2)
    
    Unvested shares of restricted stock are not included in this
    computation. 
  12.
    Acquisition      Cash

$
3,606Accounts receivable


2,121Cost and profits in excess of
    billings


905Fixed assets


1,484Billings in excess of cost and
    profits


(1,144
)Liabilities assumed


(2,872
)$
4,100  F-40




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    13.
    Stock-Based
    Compensation      Restricted
    Stock
  1 60
      Weighted Average


Weighted Average


AggregateNumber of


Fair Value


Remaining Vesting


Intrinsic TermRestricted Stock

Shares


Per Share


(Years)


ValueNonvested at December 31, 2005


1,017,937


$
0.02Granted






Vested


312,332



0.02Forfeited/repurchased shares


(100,897
)


0.02Nonvested at December 31, 2006


604,708


$
0.02Granted


26,426


$
13.50Vested


499,064



0.74Forfeited/repurchased shares


(8,969
)


0.02Nonvested at June 30, 2007


123,101


$
0.02



2.7


$
1,659Vested at June 30, 2007 and
    expected to vest


613,665


$
0.60



2.7


$
7,915  F-41




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Stock
    Options
      Weighted Average


Weighted Average


AggregateNumber of


Exercise Price


Contractual Life


IntrinsicStock Options

Shares


Per Share


(Years)


ValueOutstanding at December 31,
    2005





$
Granted


443,946



1.96Exercised


Forfeited/repurchased shares






Outstanding at December 31,
    2006


443,946


$
1.96Granted


327,357


$
13.50Exercised


(22,422
)

$
1.96Forfeited/repurchased shares


(89,686
)


Outstanding at June 30, 2007


659,195


$
7.69



9.49


$
3,829Vested at June 30, 2007 and
    expected to vest


646,011


$
1.96



9.49


$
3,752Exercisable at June 30, 2007


242,451


$
1.96



9.49


$
2,797         14.
    Stockholders
    Equity  Common
    Stock
   F-42




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Treasury
    Stock
    15. Private
    Placement Offering  the
    Transaction
   
   
 
  16.
    Enterprise
    Wide Disclosures 
 
   
 
   
  
 2007


%


2006


%Federal

$
15,469



17
%


21,673



26
%State


7,133



8
%


17,657



22
%Local


31,253



35
%


21,034



26
%Private


35,917



40
%


21,760



26
%$
89,772



100
%

$
82,124



100
%  
 
   
 F-43




---



##### Table of Contents



Orion
    Marine Group, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
   
 
   
  
 2007


2006Customer A


16.0
%


26.0
%Customer B


15.3
%



*Customer C



*


16.1
%  
   
  *
    
    represents less than 10% of revenues 
 
  17.
    Subsequent
    Event 
       F-44




---



##### Table of Contents



(IMAGE)
 F-45




---



##### 



Until          ,
    2007, all dealers that effect transactions in these securities,
    whether or not participating in this offering, may be required
    to deliver a prospectus. This is in addition, to the
    dealers obligation to deliver a prospectus when acting as
    underwriters and with respect to their unsold allotments or
    subscriptions.
  TABLE OF
    CONTENTS
  
  
 PageNOTICE TO INVESTORS


iMARKET DATA


iPROSPECTUS SUMMARY


1THE OFFERING


6SUMMARY CONSOLIDATED FINANCIAL DATA


7RISK FACTORS


10SPECIAL NOTE REGARDING FORWARD-LOOKING
    STATEMENTS


23USE OF PROCEEDS


25DIVIDEND POLICY


25CAPITALIZATION


25MARKET FOR COMMON STOCK


25SELECTED CONSOLIDATED FINANCIAL DATA


26MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


28BUSINESS


42MANAGEMENT


61COMPENSATION DISCUSSION AND ANALYSIS


67EXECUTIVE COMPENSATION


74SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT


85CERTAIN RELATIONSHIPS AND RELATED PARTY
    TRANSACTIONS


86SELLING SHAREHOLDERS


87DESCRIPTION OF CAPITAL STOCK


101SHARES ELIGIBLE FOR FUTURE SALE


105REGISTRATION RIGHTS


107DESCRIPTION OF INDEBTEDNESS


108PLAN OF DISTRIBUTION


109LEGAL MATTERS


111EXPERTS


111WHERE YOU CAN FIND MORE INFORMATION


111INDEX TO FINANCIAL STATEMENTS


F-1Opinion of Vinson & Elkins LLPLease AgreementConsent of Grant Thornton LLP  
         
  20,949,196 Shares
 of
 Common Stock
    PROSPECTUS




---



##### Table of Contents



PART II
  INFORMATION
    NOT REQUIRED IN PROSPECTUS
  Item 13.
    Other
    Expenses of Issuance and Distribution. 
   
  
 Amount to be PaidSEC Registration Fee

$
8,683Nasdaq Global Market Listing Fee

$
*FINRA Filing Fee

$
28,781.00Printing and Engraving Expenses

$
*Legal Fees and Expenses

$
*Accounting Fees and Expenses

$
*Blue Sky Fees and Expenses

$
*Transfer Agent and Registrar Fees

$
*Miscellaneous

$
*TOTAL

$  
    *
    
    To be provided by subsequent amendment.  Item 14.
    Indemnification
    of Directors and Officers.    
    for any breach of the directors duty of loyalty to us or
    our stockholders;
    for acts or omissions not in good faith or which involve
    intentional misconduct or a knowing violation of law;
    under Section 174 of the Delaware General Corporation Law
    relating to unlawful stock repurchases, redemptions or
    dividends; or
    for any transaction from which the director derives an improper
    personal benefit.       II-1




---



##### Table of Contents



Item 15.
    Recent
    Sales of Unregistered Securities.    non-U.S. persons
     II-2




---



##### Table of Contents



Item 16.
    Exhibits
    and Financial Statement Schedules    
 ExhibitNumber

Description3
.1

Amended and Restated Certificate of Incorporation of Orion
    Marine Group, Inc.3
.2

Amended and Restated Bylaws of Orion Marine Group, Inc.4
.1

Registration Rights Agreement between Friedman, Billings,
    Ramsey & Co., Inc. and Orion Marine Group, Inc. dated
    May 17, 20075
.1*

Opinion of Vinson & Elkins LLP10
.1

Loan Agreement, dated as of July 10, 2007, between Orion
    Marine Group, Inc. and Amegy Bank National Association10
.2

Purchase/Placement Agreement dated May 9, 2007 between
    Orion Marine Group, Inc. and Friedman, Billings,
    Ramsey & Co., Inc.10
.3

Amended & Restated Redemption Agreement dated
    May 7, 200710
.4

Lease dated September 13, 2006, by and between
    F. Miller Construction, LLC and Joe T. Miller Sr.10
.5

Lease dated September 28, 2006, by and between Southpoint
    Square I, Ltd. and Misener Marine Construction, Inc.10
.6

Lease dated June 23, 1997, by and between the City of Port
    Lavaca, Texas and King Fisher Marine Service, Inc.10
.7

Land Sublease Agreement dated May 1, 2007, by and between
    Signet Maritime Corporation and Orion Construction, L.P.10
.8

2005 Stock Incentive Plan10
.9

Form of Stock Option Agreement Under the 2005 Stock Incentive
    Plan & Notice of Grant of Stock Option10
.10

Form of Restricted Stock Agreement Under the 2005 Stock
    Incentive Plan & Notice of Grant of Restricted Stock10
.11

Orion Marine Group, Inc. Long Term Incentive Plan10
.12

Form of Stock Option Agreement Under the 2007 Long Term
    Incentive Plan10
.13

Form of Restricted Stock Agreement and Notice of Grant of
    Restricted Stock10
.14

Executive Incentive Plan Document Fiscal Year 200710
.15

Subsidiary Incentive Plan10
.16

Employment Agreement, dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and J. Michael Pearson10
.17

Employment Agreement, dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and Mark Stauffer10
.18

Employment Agreement , dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and Elliott Kennedy10
.19

Employment Agreement, dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and Jim Rose10
.20

Employment Agreement, dated as of August 13, 2007, by and
    between Orion Marine Group, Inc. and J. Cabell Acree, III10
.21*

Lease agreement dated May 18, 2007, by and between Lazzara
    Leasing, LLC and Misener Marine Construction, Inc.21
.1

List of Subsidiaries23
.1*

Consent of Grant Thornton24
.1

Power of Attorney (included on signature page of this filing)  
   
  *
    
    Filed herewith. 
 
 [
    
    Previously filed.] 
 II-3




---



##### Table of Contents



(b)
    
    Financial Statement Schedules      Item 17.
    Undertakings.                     II-4




---



##### Table of Contents



II-5




---



##### Table of Contents



SIGNATURES
 
   
  
  By:
    /s/  J.
    Michael Pearson   Title:
    President and Chief Executive Officer 
   
 
 Signature

Title

Date/s/  J.
    Michael PearsonJ.
    Michael Pearson

President and Chief
    Executive Officer
    (Principal Executive Officer)

October 2, 2007/s/  Mark
    Stauffer*Mark
    Stauffer

Secretary and Chief
    Financial Officer
    (Principal Financial Officer
    and Principal Accounting Officer)

October 2, 2007/s/  Richard
    L. Daerr, Jr.*Richard
    L. Daerr, Jr.

Chairman of the Board

October 2, 2007/s/  Thomas
    N. Amonett*Thomas
    N. Amonett

Director

October 2, 2007/s/  Austin
    J. Shanfelter*Austin
    J. Shanfelter

Director

October 2, 2007/s/  Gene
    Stoever*Gene
    Stoever

Director

October 2, 2007  
 
  *By:
    /s/  J.
    Michael Pearson 
 
 
 Attorney-in-Fact
 
 II-6




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm




---



##### Table of Contents



ORION
    MARINE GROUP, INC.
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
  Balance at the


Charged to





Balance at theBeginning of


Revenue, Cost,





End ofDescription

the Period


or Expenses


Deductions


the Period(In thousands)Year ended December 31,
    2004:Provision for Doubtful Accounts


$



$



$



$Year ended December 31,
    2005:Provision for Doubtful Accounts


$



$



$



$Year ended December 31,
    2006:Provision for Doubtful Accounts


$



$500



$



$500Six Months ended June 30,
    2007:Provision for Doubtful Accounts


$500



$



$



$500




---



##### Table of Contents



EXHIBIT INDEX
  
 ExhibitNumber

Description3
.1

Amended and Restated Certificate of Incorporation of Orion
    Marine Group, Inc.3
.2

Amended and Restated Bylaws of Orion Marine Group, Inc.4
.1

Registration Rights Agreement between Friedman, Billings,
    Ramsey & Co., Inc. and Orion Marine Group, Inc. dated
    May 17, 20075
.1*

Opinion of Vinson & Elkins LLP10
.1

Loan Agreement, dated as of July 10, 2007, between Orion
    Marine Group, Inc. and Amegy Bank National Association10
.2

Purchase/Placement Agreement dated May 9, 2007 between
    Orion Marine Group, Inc. and Friedman, Billings,
    Ramsey & Co., Inc.10
.3

Amended & Restated Redemption Agreement dated
    May 7, 200710
.4

Lease dated September 13, 2006, by and between
    F. Miller Construction, LLC and Joe T. Miller Sr.10
.5

Lease dated September 28, 2006, by and between Southpoint
    Square I, Ltd. and Misener Marine Construction, Inc.10
.6

Lease dated June 23, 1997, by and between the City of Port
    Lavaca, Texas and King Fisher Marine Service, Inc.10
.7

Land Sublease Agreement dated May 1, 2007, by and between
    Signet Maritime Corporation and Orion Construction, L.P.10
.8

2005 Stock Incentive Plan10
.9

Form of Stock Option Agreement Under the 2005 Stock Incentive
    Plan & Notice of Grant of Stock Option10
.10

Form of Restricted Stock Agreement Under the 2005 Stock
    Incentive Plan & Notice of Grant of Restricted Stock10
.11

Orion Marine Group, Inc. Long Term Incentive Plan10
.12

Form of Stock Option Agreement Under the 2007 Long Term
    Incentive Plan10
.13

Form of Restricted Stock Agreement and Notice of Grant of
    Restricted Stock10
.14

Executive Incentive Plan Document Fiscal Year 200710
.15

Subsidiary Incentive Plan10
.16

Employment Agreement, dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and J. Michael Pearson10
.17

Employment Agreement, dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and Mark Stauffer10
.18

Employment Agreement , dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and Elliott Kennedy10
.19

Employment Agreement, dated as of April 2, 2007, by and
    between Orion Marine Group, Inc. and Jim Rose10
.20

Employment Agreement, dated as of August 13, 2007, by and
    between Orion Marine Group, Inc. and J. Cabell Acree, III10
.21*

Lease Agreement dated May 18, 2007, by and between Lazzara
    Leasing, LLC and Misener Marine Construction, Inc.21
.1

List of Subsidiaries23
.1*

Consent of Grant Thornton24
.1

Power of Attorney (included on signature page of this filing)  
   
  *
    
    Filed herewith. 
 
 
    
    Previously filed