<PAGE>   1
===============================================================================

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

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

                                    FORM 10-Q

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

                For the Quarterly Period Ended September 30, 1998

                                       OR

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

                        Commission file number 333-38157

                             First Wave Marine, Inc.
             (Exact name of Registrant as specified in its charter)

               Delaware                                  76-0461352
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

            2102 Broadway
            Houston, Texas                                 77012
(Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (713) 847-4600

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]  No [ ]

Number of shares of common stock outstanding as of November 12, 1998: 11,756,955

================================================================================
<PAGE>   2

                             FIRST WAVE MARINE, INC.

                               INDEX TO FORM 10-Q
                        FOR THE THREE MONTH PERIOD ENDED
                               SEPTEMBER 30, 1998

                                                                            Page
                                                                            ----
Part I:   Financial Information

Item 1.   Financial Statements

               Consolidated Balance Sheets - September 30, 1998 and
                   December 31, 1997                                          1

               Consolidated Statements of Operations for the Three Month
                   and Nine Month Periods Ended September 30, 1998 and 1997   2

               Consolidated Statements of Cash Flows for the Nine Month
                   Periods Ended September 30, 1998 and 1997                  3

               Notes to Unaudited Consolidated Financial Statements           4

Item 2.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                      8

Part II:  Other Information

Item 1.   Legal Proceedings                                                  15

Item 2.   Changes in Securities and Use of Proceeds                          15

Item 6.   Exhibits and Reports on Form 8-K                                   16


<PAGE>   3

Item 1.      FINANCIAL STATEMENTS

                    FIRST WAVE MARINE, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                      (In thousands, except per share data)

<TABLE>

                                                      ASSETS

                                                                                           September 30,    December 31,
                                                                                               1998             1997
                                                                                         ---------------    ------------
<S>                                                                                      <C>                <C>
                                                                                           (Unaudited)

                Current assets:
                   Cash and cash equivalents                                               $  4,804        $     378
                   Investments available-for-sale                                             2,067              ---
                   Investments held-to-maturity                                               6,179              ---
                   Accounts receivable, less allowance of $232 in 1998
                      and $37 in 1997                                                        23,910            8,488
                   Inventories                                                                  750              792
                   Costs and estimated earnings in excess of billings on
                      uncompleted contracts                                                   3,559              793
                   Prepaids and other                                                           389              341
                   Income tax receivable                                                        503              773
                   Deferred income taxes                                                        320              281
                                                                                           --------        ---------
                      Total current assets                                                   42,481           11,846
                Property and equipment, net                                                  65,921           23,326
                Financing costs, net                                                          4,157            1,438
                Goodwill and other intangibles, net                                          16,531            2,726
                Deposits and other                                                              831              210
                                                                                           --------        ---------
                                                                                           $129,921        $  39,546
                                                                                           ========        =========


                                       LIABILITIES AND STOCKHOLDERS' EQUITY

                Current liabilities:
                   Accounts payable                                                        $  4,068        $   1,354
                   Accrued liabilities                                                        7,719            3,319
                   Billings in excess of costs and estimated earnings on
                      uncompleted contracts                                                     489              ---
                   Accrued interest payable                                                   1,650              637
                   Notes payable                                                                203              215
                                                                                           --------        ---------
                      Total current liabilities                                              14,129            5,525
                Long-term obligations                                                         3,209           17,781
                Subordinated debt                                                             6,328            6,876
                Senior notes                                                                 90,000              ---
                Deferred income taxes                                                         5,618              632
                Other liabilities                                                             1,745              678
                Commitments and contingencies                                                   ---              ---
                Stockholders' equity:
                   Preferred stock, $.01 par value, 2,000 shares
                       authorized, no shares issued                                             ---              ---
                   Common stock, $.01 par value, 21,000 shares
                       authorized, 11,757 shares issued and outstanding
                       at September 30, 1998 and December 31, 1997                              118              118
                   Additional paid-in capital                                                 3,490            3,490
                   Retained earnings                                                          5,284            4,446
                                                                                           --------        ---------   
                       Total stockholders' equity                                             8,892            8,054
                                                                                           --------        --------- 
                                                                                           $129,921        $  39,546
                                                                                           ========        =========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       1
<PAGE>   4

                    FIRST WAVE MARINE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

            For the Three and Nine Month Periods Ended September 30,
                     (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
                                                                    Three Months Ended                Nine Months Ended
                                                                      September 30,                     September 30,
 
                                                                     1998            1997          1998            1997
                                                                     ----            ----          ----            ----
Revenues:
<S>                                                                 <C>            <C>            <C>            <C>
   Repair and upgrade                                               $18,401        $ 6,296        $49,097        $19,801
   New construction                                                   5,830            ---          9,572            881
   Environmental services                                             1,229          1,229          3,937          3,784
                                                                    -------        -------        -------        -------
                                                                     25,460          7,525         62,606         24,466
Cost of revenues                                                     17,297          4,837         41,228         14,330
                                                                    -------        -------        -------        -------
   Gross profit                                                       8,163          2,688         21,378         10,136
General and administrative expenses                                   4,467          1,136         11,906          3,943
                                                                    -------        -------        -------        -------
   Income from operations                                             3,696          1,552          9,472          6,193
Interest expense - net                                                2,400            438          6,464          1,280
Minority interest in net earnings of subsidiary                         --             133            --             536
                                                                    -------        -------        -------        -------  
   Income before income taxes and extraordinary item                  1,296            981          3,008          4,377
Income tax expense                                                      508            473          1,237          1,837
                                                                    -------        -------        -------        -------    
   Income before extraordinary item                                     788            508          1,771          2,540
Extraordinary item - loss on extinguishment of debt, net        
   of income tax benefit of $559                                        ---            ---           (933)           ---
                                                                    -------        -------        -------        -------  
   Net income                                                       $   788        $   508        $   838        $ 2,540
                                                                    =======        =======        =======        =======

Basic and diluted earnings per share:
   Before extraordinary item                                        $  0.07        $  0.05        $  0.15        $  0.24
   Extraordinary item                                                  ---            ---           (0.08)          ---
                                                                    -------        -------        -------        -------
   Net income                                                       $  0.07        $  0.05        $  0.07        $  0.24
                                                                    =======        =======        =======        =======
Weighted-averaged shares:
   Basic and diluted                                                 11,757         10,651         11,757         10,650
                                                                    =======        =======        =======        =======

</TABLE>


        The accompanying notes are an integral part of these statements.

                                        2
<PAGE>   5

                    FIRST WAVE MARINE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 For the Nine Month Periods Ended September 30,
                                 (In thousands)
                                   (Unaudited)

<TABLE>
                                                                                             1998             1997
                                                                                          ---------        ---------   
<S>                                                                                       <C>              <C>
    Cash flows from operating activities:

       Net income                                                                         $     838        $   2,540
       Adjustments to reconcile net income to net cash (used in)
          provided by operating activities:
          Depreciation and amortization                                                       2,956            1,037
          Accretion of discounts on investments held-to-maturity                               (403)             ---
          Minority interest on earnings                                                         ---              536
          Provision for doubtful accounts                                                       159              ---
          Gain on sale of property and equipment                                                 (8)             ---
          Write-off of property and equipment                                                   124              ---
          Write-off of financing costs                                                          469              ---
          Deferred income tax provision                                                         354              270
          Change in assets and liabilities, net of effects from acquisitions:
            Accounts receivable                                                             (11,953)          (1,046)
            Inventories                                                                          72              (86)
            Costs and estimated earnings in excess of billings on uncompleted                (2,069)              90
                contracts                                                                                                     
            Other assets                                                                        713               40
            Income tax receivable                                                              (955)             139
            Deposits and other                                                                 (479)              32
            Due to bank                                                                         ---              (88)
            Accounts payable                                                                  1,614              (85)
            Accrued liabilities                                                               2,796              673
            Billings in excess of costs and estimated earnings on uncompleted           
                contracts                                                                       489              ---
            Accrued interest payable                                                          1,013              ---
            Other liabilities                                                                   767              384
                                                                                          ---------        ---------
                  Net cash (used in) provided by operating activities:                       (3,503)           4,436
                                                                                          ---------        ---------
    Cash flows from investing activities:
       Acquisition of property and equipment                                                (16,863)          (1,890)
       Acquisition of businesses, net of cash acquired                                      (19,399)             ---
       Purchase of investments held-to-maturity                                             (10,792)             ---
       Purchase of investments available-for-sale                                            (2,000)             ---
       Proceeds from maturity of investments held-to-maturity                                 4,950              ---
       Proceeds from sales of property and equipment                                             31              ---
       Asset acquisition costs                                                                  (58)            (118)
                                                                                          ---------        ---------
                   Net cash used in investing activities                                    (44,131)          (2,008)
    Cash flows from financing activities:                                                 ---------        ---------
       Proceeds from issuance of debt                                                        90,000            1,130
       Payments on long-term debt and notes payable                                         (33,411)            (951)
       Net payments on revolving lines of credit                                             (1,027)          (1,530)
       Financing costs                                                                       (3,502)             ---
       Issuance of common stock                                                                 ---                2
                                                                                          ---------        ---------
                   Net cash provided by (used in) financing activities                       52,060           (1,349)
                                                                                          ---------        ---------
                   Net increase in cash and cash equivalents                                  4,426            1,079
    Cash and cash equivalents at beginning of period                                            378              ---
                                                                                          ---------        ---------
    Cash and cash equivalents at end of period                                            $   4,804        $   1,079
                                                                                          =========        =========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3
<PAGE>   6

                    FIRST WAVE MARINE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                      (In thousands, except per share data)

Note 1       In the opinion of management the accompanying unaudited 
             consolidated financial statements reflect all adjustments necessary
             to present fairly the financial position of First Wave Marine, Inc.
             ("First Wave" or the "Company") as of September 30, 1998, and the
             results of operations for the three and nine month periods ended
             September 30, 1998 and 1997 and cash flows for the nine month
             periods ended September 30, 1998 and 1997. All such adjustments are
             of a normal recurring nature. These interim financial statements
             should be read in conjunction with the audited financial statements
             and related notes included in the Company's Annual Report on Form
             10-K for the year ended December 31, 1997.

Note 2       The consolidated financial statements include the accounts of First
             Wave and its wholly-owned subsidiaries. All material intercompany
             transactions are eliminated in consolidation.

Note 3       The results of operations for the nine month period ended 
             September 30, 1998 are not necessarily indicative of the results to
             be expected for the entire year.

Note 4       11% Senior Notes Offering - On February 2, 1998, the Company
             completed a registered offering of $90,000 aggregate principal
             amount of senior notes. The senior notes bear interest at the rate
             of 11% per annum; principal is due at maturity in February 2008.
             The senior notes are fully and unconditionally guaranteed, jointly
             and severally, by all of the Company's direct and indirect
             subsidiaries. Each subsidiary guarantor is 100% owned by the
             Company.

             The Company is subject to restrictive covenants under the related
             trust indenture. The indenture contains covenants that, among other
             things, limit the ability of the Company and its subsidiaries to
             incur additional indebtedness, make certain investments, create
             some types of liens, enter into certain transactions with
             affiliates, sell assets, enter into some types of mergers and
             consolidations, allow subsidiaries to create certain dividend and
             other payment restrictions, enter into sale and leaseback
             transactions, and issue or sell capital stock of subsidiaries.

             Separate financial statements and other disclosures concerning the
             subsidiary guarantors are not presented because management has
             determined such financial statements and other disclosures are not
             material to investors. The combined

                                       4
<PAGE>   7

             condensed income statement information for the Company's subsidiary
             guarantors is the same as the Company's. The combined condensed
             balance sheet information of the Company's subsidiary guarantors is
             as follows:

<TABLE>
                                                                                   September 30,          December 31,
                                                                                       1998                   1997
                                                                                   -------------          ------------
                <S>                                                                <C>                    <C>
                Current assets
                     Cash and cash equivalents                                        $       --          $       373
                     Accounts receivable                                                  23,886                8,425
                     Other                                                                 5,062                2,269
                                                                                      ----------          -----------
                                                                                          28,948               11,067
                Property and equipment                                                    65,292               23,304
                Intangible assets                                                         14,185                1,105
                Other                                                                        386                1,141
                                                                                      ----------          -----------
                         Total assets                                                 $  108,811          $    36,617
                                                                                      ==========          ===========

                Current liabilities                                                   $   12,033          $     4,228
                Non-current liabilities                                                   74,123               25,565
                Stockholders' equity                                                      22,655                6,824
                                                                                      ----------          -----------
                         Total liabilities and stockholders' equity                   $  108,811          $    36,617
                                                                                      ==========          ===========
</TABLE>

Note 5       Acquisitions - On February 2, 1998, the Company completed the
             acquisition of all of the outstanding capital stock of John
             Bludworth Marine, Inc., ("John Bludworth Marine") a company that
             owns and operates shipyard facilities in Pasadena, Texas and
             Galveston, Texas. The Company paid $15,000 in cash and issued a
             promissory note in the amount of $4,000. The Company used a portion
             of the proceeds from its $90,000 senior notes offering (discussed
             above) to fund the cash portion of the acquisition. The promissory
             note was adjustable upward or downward based upon outstanding debt
             and a final calculation of earnings before interest, taxes,
             depreciation and amortization ("EBITDA") of the acquired company.
             The final calculation of the applicable outstanding debt of John
             Bludworth Marine resulted in an increase to the purchase price of
             approximately $5,157. The final calculation of EBITDA resulted in
             an increase to the purchase price of approximately $1,480. The
             promissory note bore interest at 8.5% per annum and was payable on
             or before July 31, 1998.

             On May 27, 1998, $5,157 of the promissory note was paid. The
             balance of the note, approximately $5,500, was paid on July 30,
             1998.

             The acquisition has been accounted for as a purchase and the
             results of John Bludworth Marine have been included in the
             accompanying consolidated financial statements since the date of
             the acquisition. The allocation of the purchase price

                                       5
<PAGE>   8
             resulted in intangibles, primarily goodwill, of approximately
             $14,081 which are being amortized on a straight-line basis over a
             forty year period.

             On May 15, 1998, the Company completed the acquisition of certain
             assets of the Barge Building Division of Galveston Shipbuilding
             Company ("BBD - GSC"). The Company acquired the fixed assets,
             including land, a contract to build four tank barges and up to five
             barge covers, and the name "Galveston Shipbuilding Company" for
             $5,500, subject to a final purchase price adjustment based upon the
             performance of the business. The acquisition has been accounted for
             as a purchase and the results of BBD - GSC have been included in
             the accompanying consolidated financial statements since the date
             of the acquisition.

             The following unaudited pro forma consolidated results of
             operations have been prepared as if John Bludworth Marine and
             BBD-GSC had been acquired as of January 1 of fiscal 1998 and 1997.
             This pro forma information is not necessarily indicative of the
             results of operations that would have occurred had the acquisitions
             been made on those dates or of results which may occur in the
             future.

<TABLE>
                                                            Three Months Ended           Nine Months Ended
                                                              September 30,                September 30,
                                                            1998          1997           1998         1997
                                                            ----          ----           ----         ----
<S>                                                     <C>            <C>            <C>          <C>    
             Revenues                                   $ 25,460       $18,963        $70,588      $57,297
             Income before extraordinary item                788         1,525          2,698        5,074
             Net income                                      788         1,525          1,765        5,074
             Basic and diluted earnings per share:
                 Before extraordinary item              $   0.07       $  0.14        $  0.23      $  0.48
                 Net income                                 0.07          0.14           0.15         0.48
</TABLE>

Note 6       Shareholder Line of Credit - In February 1998, the board of
             directors of the Company approved a maximum $1,000 line of credit
             available to three employee director shareholders of the Company.
             The line of credit allows borrowings of up to $600 to one of the
             shareholders and up to $200 to each of the other two shareholders.
             Any borrowings under the line of credit will bear an interest rate
             of 6% per annum with interest payable annually and principal to be
             amortized over a ten year period through the pro rata reduction of
             the line of credit commencing March 2001.

Note 7       Cash and Cash Equivalents - The Company maintains cash and cash
             equivalents with various financial institutions. At times, the
             balances in these accounts could exceed the FDIC insured balance
             limit of $100 per bank.

             At September 30, 1998, the Company had $4,167 invested in money
             market funds. The funds seek to pay income monthly and to maintain
             a constant value of $1 per share. The funds invest in high quality
             money market instruments which consist primarily of U.S. Treasury
             obligations, obligations issued or guaranteed by U.S.

                                       6
<PAGE>   9

             agencies or instrumentalities, mortgage-backed securities,
             commercial paper, bank obligations and deposit notes.

Note 8       Investments Available-for-Sale - Included in investments
             available-for-sale at September 30, 1998 is an investment in a
             mutual fund which invests in another portfolio that invests
             primarily in "loan interest" - portions of senior, floating-rate
             loans made by U.S. banks and other financial institutions to large
             corporate customers. The fund seeks to achieve a high level of
             current income while minimizing fluctuations in net asset values.
             The carrying value and estimated fair value of the investment at
             September 30, 1998 were substantially the same.

Note 9       Investments Held-to-Maturity - As a result of the 11% Senior Notes
             offering, the Company was required to deposit funds into a trust
             account to pay the first and second semi-annual interest payments
             on the notes. Two securities were purchased with maturity dates as
             near as possible to the interest payment dates. At maturity, the
             value of both securities will approximate the amount of the
             semi-annual interest payment, which is $4,950. A Fannie Mae
             Discount Note which matured on July 27, 1998 was purchased for
             approximately $4,824 to cover the August 1, 1998 interest payment.
             A U.S. Treasury Bill with a maturity date of January 7, 1999 was
             purchased for approximately $4,718 to cover the February 1, 1999
             interest payment. The approximate fair value of the U.S. Treasury
             Bill at September 30, 1998 was $4,913.

             Also included in "Investments held-to-maturity" are a certificate
             of deposit with a financial institution in the amount of $1,000
             with a maturity date of February 4, 1999, and another certificate
             of deposit with another financial institution in the amount of $250
             with a maturity date of February 3, 1999. The balances of both
             certificates of deposit exceed the FDIC insured balance limit of
             $100 per bank.

Note 10      Line of Credit - On June 9, 1998, the Company entered into a credit
             agreement to obtain a $10,000 revolving line of credit facility
             with a financial institution. The facility is collateralized by
             accounts receivable. Borrowings on the line of credit bear interest
             at the Wall Street Journal Prime Rate plus one-half percent. There
             were no borrowings outstanding on the line of credit at 
             September 30, 1998.

Note 11      On August 13, 1998, one of the Company's subsidiaries, Newpark
             Shipbuilding-Brady Island, Inc., was the subject of a search
             warrant executed by a multi-agency environmental task force. The
             government's search warrant was primarily directed at the
             facility's wastewater treatment plant. The Board of Directors of
             the Company has authorized outside legal counsel to conduct an
             internal corporate investigation of the matters raised by the
             agencies in their investigation. The investigation has not been
             completed at this time. Therefore, the Company cannot now estimate
             the impact that may result from enforcement action, if any, related
             to the government's investigation, or any other issues that may be
             raised in connection with the company's internal investigation.

                                       7
<PAGE>   10

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

             All statements other than statements of historical fact contained
             in this Form 10-Q, including statements in this "Management's
             Discussion and Analysis of Financial Condition and Results of
             Operations", as well as statements as may be made by management,
             orally or in writing, concerning results of operations, future
             expansion plans, future earnings, capital expenditures,
             environmental and other expenditures, are forward-looking
             statements. Forward-looking statements generally are accompanied by
             words such as "anticipate," "believe," estimate" or "expect" or
             similar statements. Although the Company believes that the
             expectations reflected in such forward-looking statements are
             reasonable, no assurance can be given that such expectations will
             prove correct. Factors that could cause the Company's results to
             differ materially from the results discussed in such
             forward-looking statements include risks such as the difficulties
             related to managing growth in operations, the dependence on
             significant customers, competition, the risks associated with
             contractual pricing, the success of the recent expansion into the
             offshore drilling rig segment, the dependence of that segment on
             the oil and gas industry, and labor, operating, regulatory and
             other risks in the shipbuilding industry as well as risks relating
             to any reductions in the capital expenditure budgets of the
             Company's customers in the offshore support vessel, offshore
             drilling rig, offshore barge, ships, and inland marine industries.
             All forward-looking statements made herein and as may be made by
             management, orally or in writing, are expressly qualified in their
             entirety by the cautionary statements in this paragraph.

             The following discussion of the Company's financial condition,
             results of operations, liquidity and capital resources should be
             read in conjunction with the Company's Consolidated Financial
             Statements and the Notes to the Consolidated Financial Statements
             included elsewhere in this report.

             General

             The Company's business is primarily derived from providing repair
             and upgrade services to inland and offshore marine vessels,
             including barges, boats, drilling rigs and ships. To a lesser
             extent the Company engages in new construction of such inland and
             offshore marine vessels. The Company believes the demand for repair
             and upgrade services is generally more stable than the demand for
             new construction, but recognizes the need to continually monitor
             the mix of new construction and repair and upgrade services. While
             trends in oil and natural gas prices can affect the demand for
             offshore support vessels and drilling rigs, the Company anticipates
             demand will exist for repair activity even with a short-term
             downturn in oil and gas prices. While any prolonged depression in
             oil and natural gas prices could have an adverse effect on the
             Company's results of operations if a significant number of offshore
             support vessels and drilling rigs were taken out of active service
             in the Gulf of Mexico, the declines in oil and gas prices in 1998
             have not significantly affected the Company's operations to date.

                                       8
<PAGE>   11

             On May 15, 1998, the Company acquired its Galveston Island shipyard
             with its completion of the acquisition of certain assets of the
             Barge Building Division of Galveston Shipbuilding Company ("BBD -
             GSC"). The Company acquired the fixed assets, including land, a
             contract to build four tank barges and up to five barge covers, and
             the name "Galveston Shipbuilding Company" for $5.5 million, subject
             to a final purchase price adjustment based upon the performance of
             the business. The acquisition has been accounted for as a purchase
             and the results of BBD - GSC have been included in the accompanying
             consolidated financial statements since the date of acquisition.

             On February 2, 1998, the Company completed an offering of $90
             million of senior notes. The senior notes bear interest at the rate
             of 11% per annum with principal due at maturity in February 2008.
             The senior notes are fully guaranteed, jointly and severally, by
             all of the Company's direct and indirect subsidiaries.

             Simultaneously with closing the senior notes offering, the Company
             completed the acquisition of all of the outstanding shares of John
             Bludworth Marine, Inc. ("John Bludworth Marine"). The John
             Bludworth Marine acquisition provided the Company with the Pasadena
             facility near Houston, Texas and the West Pelican Island facility
             in Galveston, Texas. The Company paid $15.0 million in cash and
             issued a promissory note in the amount of $4.0 million. The
             promissory note was adjustable upward or downward based upon
             outstanding debt and a final calculation of earnings before
             interest, taxes, depreciation and amortization ("EBITDA") of the
             acquired company. The final calculation of the applicable
             outstanding debt of John Bludworth Marine resulted in an increase
             to the purchase price of approximately $5.2 million. The final
             calculation of EBITDA resulted in an increase to the purchase price
             of approximately $1.5 million. The promissory note as adjusted for
             outstanding debt and EBITDA bore interest at 8.5% per annum and was
             payable on or before July 31, 1998. On May 27, 1998, the Company
             paid approximately $5.2 million of the promissory note. The balance
             of the promissory note, approximately $5.5 million, was paid on
             July 30, 1998.

             First Wave currently operates three shipyards in the Houston, Texas
             area (Brady Island, Greens Bayou and Pasadena) and three in the
             Galveston, Texas area (East Pelican Island, West Pelican Island and
             Galveston Island). The Company currently employs approximately
             1,200 employees at its six shipyards.

             The Company also provides related environmental services, including
             cleaning, degassing and wastewater treatment. Although this
             business comprises a small percentage of the Company's total
             revenues, it generates high margins and enhances the Company's
             strategy to be the only one-stop source of all shipyard services
             for all segments of the offshore and inland marine markets in
             Texas.

                                      9
<PAGE>   12

             Recent Developments

             On August 13, 1998, one of the Company's subsidiaries, Newpark
             Shipbuilding-Brady Island, Inc., was the subject of a search
             warrant executed by a multi-agency environmental task force. The
             government's search warrant was primarily directed at the
             facility's wastewater treatment plant. The Company's stated policy
             is to comply with all government laws and regulations and to
             operate with the highest degree of integrity. The Board of
             Directors of the Company has authorized outside legal counsel to
             conduct an internal corporate investigation of the matters raised
             by the agencies in their investigation. The investigation has not
             been completed at this time. Therefore, the Company cannot now
             estimate the impact that may result from enforcement action, if
             any, related to the government's investigation, or any other issues
             that may be raised in connection with the company's internal
             investigation.

             Results of Operations

             Comparison of the three months ended September 30, 1998 to the
             three months ended September 30, 1997.

             Revenues increased 238% to $25.5 million in the 1998 period,
             compared with $7.5 million in the 1997 period, primarily due to
             five additional shipyards in operation during the 1998 period as
             compared to only one shipyard in operation during the full 1997
             period. The Greens Bayou facility, a start-up, began generating
             revenues in the third quarter of 1997. The East Pelican Island
             facility, another start-up, began generating revenues in the first
             quarter of 1998. As discussed above, the Pasadena and West Pelican
             Island facilities were acquired on February 2, 1998. The Galveston
             Island facility was acquired on May 15, 1998 as a result of the
             BBD-GSC acquisition.

             Cost of revenues rose 258% to $17.3 million in the 1998 period from
             $4.8 million in the 1997 period, primarily due to the additional
             shipyards in operation during the 1998 period.

             Gross profit increased 204% to $8.2 million in the 1998 period from
             $2.7 million in the 1997 period, primarily due to the additional
             shipyards in operation during the 1998 period. The gross profit
             margin decreased to 32% in the 1998 period from 36% in the 1997
             period, due in part to the increase in lower margin new
             construction work as a percentage of total revenue and the decrease
             in higher margin environmental services revenue as a percentage of
             total revenue.

             General and administrative expenses increased 293% to $4.5 million
             in the 1998 period from $1.1 million in the 1997 period. General
             and administrative expenses as a percentage of revenues for the
             1998 period represented 17.5% of total revenues, as

                                       10
<PAGE>   13

             compared to 15.1% for the 1997 period. The increase in general and
             administrative expenses as a percentage of revenues is due in large
             part to several factors, including, the corporate staffing of First
             Wave to provide oversight of current operations and prepare the
             Company for future growth, the full staffing and certain overhead
             expenses incurred at the start-up of the East Pelican Island and
             Greens Bayou operations in advance of revenue generation, costs
             associated with being a publicly reporting company, and additional
             legal fees incurred of approximately $330,000 related to the
             environmental investigation at the Brady Island facility.

             Net interest expense rose to $2.4 million in the 1998 period from
             $438,000 in the 1997 period primarily due to three months of
             interest expense on the $90 million 11% Senior Notes reflected in
             the 1998 period.

             The elimination of minority interest in the 1998 period from
             approximately $133,000 in the 1997 period is due to all minority
             shareholders of this subsidiary exchanging their shares for shares
             in First Wave effective December 31, 1997.

             The increase in income tax expense from approximately $473,000 in
             the 1997 period to $508,000 in the 1998 period is directly
             attributable to the increase in income before income taxes and
             extraordinary item.

             The increase in net income from the 1997 period to the 1998 period
             is primarily due to the increase in gross profit associated with
             the additional shipyards in operation, which was substantially
             offset by the additional interest expense related to the $90
             million 11% Senior Notes, the additional corporate staffing, the
             increase in general and administrative expenses related to the
             start-up of the East Pelican Island and Greens Bayou shipyards, and
             the increase in legal fees incurred in connection with the
             environmental investigation at the Brady Island facility.

             Comparison of the nine months ended September 30, 1998 to the nine
             months ended September 30, 1997.

             Revenues increased 156% to $62.6 million in the 1998 period,
             compared with $24.5 million in the 1997 period, primarily due to
             five additional shipyards in operation during the 1998 period as
             compared to only one shipyard in operation during the full 1997
             period. The Greens Bayou facility, a start-up, began generating
             revenues in the third quarter of 1997. The East Pelican Island
             facility, another start-up, began generating revenues in the first
             quarter of 1998. As discussed above, the Pasadena and West Pelican
             Island facilities were acquired on February 2, 1998 as a result of
             the John Bludworth Marine acquisition. The Galveston Island
             facility was acquired on May 15, 1998 as a result of the BBD-GSC
             acquisition. Only the results of operations of John Bludworth
             Marine and BBD-GSC subsequent to the date of acquisition are
             included in the results of operations of the Company for the nine
             month period ended September 30, 1998.

                                       11
<PAGE>   14

             Cost of revenues rose 188% to $41.2 million in the 1998 period from
             $14.3 million in the 1997 period, primarily due to the additional
             shipyards in operation during the 1998 period.

             Gross profit increased 111% to $21.4 million in the 1998 period
             from $10.1 million in the 1997 period due to the additional
             shipyards in operation during the 1998 period. The gross profit
             margin decreased to 34% in the 1998 period from 41% in the 1997
             period, due in part to certain operational inefficiencies
             associated with the start-up nature of the East Pelican Island
             shipyard which affected early gross profit margins, and the
             decrease in higher margin environmental services revenue as a
             percentage of total revenue.

             General and administrative expenses increased 202% to $11.9 million
             in the 1998 period from $3.9 million in the 1997 period. General
             and administrative expenses as a percentage of revenues for the
             1998 period represented 19% of total revenues, as compared to 16%
             for the 1997 period. The increase in general and administrative
             expenses as a percentage of revenues is in large part due to
             several factors, including, the corporate staffing of First Wave to
             provide oversight of current operations and prepare the Company for
             future growth, the full staffing and certain overhead expenses
             incurred at the start-up operations in advance of revenue
             generation, costs associated with being a publicly reporting
             company, and additional legal fees incurred of approximately
             $330,000 related to the environmental investigation at the Brady
             Island facility.

             Net interest expense rose to $6.5 million in the 1998 period from
             $1.3 million in the 1997 period due to eight months of interest
             expense on the $90 million 11% Senior Notes reflected in the 1998
             period.

             The elimination of minority interest in the 1998 period from
             approximately $536,000 in the 1997 period is due to all minority
             shareholders of this subsidiary exchanging their shares for shares
             in First Wave effective December 31, 1997.

             The decrease in income tax expense from approximately $1.8 million
             in the 1997 period to $1.2 in the 1998 period is directly
             attributable to the decrease in income before income taxes and the
             extraordinary item.

             The extraordinary item reflected in the 1998 period of
             approximately $933,000 relates to approximately $1.5 million in
             loss on extinguishment of debt, net of income tax benefit of
             approximately $559,000.

             The decrease in net income from the 1997 period to the 1998 period
             is primarily due to the following: the loss on the extinguishment
             of debt; the additional interest expense related to the $90 million
             11% Senior Notes; the additional corporate staffing; the increase
             in general and administrative expenses incurred in connection with
             the start-up of the East Pelican Island and Greens Bayou shipyards;
             and the

                                       12
<PAGE>   15

             increase in legal fees incurred in connection with the
             environmental investigation at the Brady Island facility.

             Inflation and Changing Prices

             The Company does not believe that general price inflation has had a
             significant impact on the Company's results of operations during
             the periods presented. To the extent that the effects of inflation
             are not offset by improvements in manufacturing and purchasing
             efficiency and labor productivity, the Company generally has been
             able to take such effects into account in pricing its contracts
             with customers. There can be no assurance, however, that inflation
             will not have a material effect on the Company's business in the
             future.

             Liquidity and Capital Resources

             The Company's ongoing liquidity requirements arise primarily from
             its need to service debt, fund working capital, acquire additional
             shipyard facilities and make capital improvements to its
             facilities. Prior to the Company's senior notes offering discussed
             below, bank financing and internally generated funds provided
             funding for these activities.

             The Company completed its $90 million 11% Senior Notes offering on
             February 2, 1998. Simultaneous with the senior notes offering, the
             Company used $15.0 million of the net proceeds of the offering to
             complete the John Bludworth Marine acquisition. As a provision of
             the senior notes offering, the Company was required to deposit
             sufficient funds in a trust account to cover the first two
             semi-annual interest payments on the senior notes. The expenses
             incurred by the Company in connection with the senior notes
             offering were approximately $4.4 million. Subsequent to the senior
             notes offering and the John Bludworth Marine acquisition,
             approximately $25.2 million was used to prepay indebtedness of the
             Company. On May 15, 1998, $5.5 million of the net proceeds of the
             offering was used to complete the BBD-GSC acquisition. On May 27,
             1998, $5.2 million was used to paydown the promissory note to the
             former owner of John Bludworth Marine. On July 30, 1998, $5.5
             million was used to pay the balance of the promissory note.

             Excluding the acquisition of the Pasadena facility, the West
             Pelican Island facility and the Galveston Island facility, the
             Company has used approximately $16.9 million of proceeds from the
             senior notes offering on capital expenditures during the nine month
             period ended September 30, 1998. The Company has budgeted
             approximately $10 million of capital expenditures for the remainder
             of 1998.

             Under its indenture entered into in connection with the senior
             notes offering, the Company is permitted to borrow up to the
             greater of $20 million or 85% of its accounts receivable. On 
             June 9, 1998, the Company obtained a $10.0 million revolving line
             of credit collateralized by accounts receivable. Additionally, the

                                       13
<PAGE>   16

             Company is renegotiating $4.0 million in borrowing capacity under
             another revolving line of credit. There were no borrowings
             outstanding on any of the lines of credit at September 30, 1998.

             Net cash (used in) provided by operating activities for the nine
             month periods ended September 30, 1998 and 1997 was $(3.5) million
             and $4.4 million, respectively. The decrease in cash generated from
             operations is primarily due to the lower earnings during the 1998
             period (as discussed above), and the substantial growth in accounts
             receivable, net of accounts receivable acquired in the John
             Bludworth Marine acquisition.

             Net cash used in investing activities was $44.1 million and $2.0
             million for the nine month periods ended September 30, 1998 and
             1997, respectively. During the 1998 period, cash used in investing
             activities was for the completion of the John Bludworth Marine and
             BBD-GSC acquisitions, capital improvements and the purchase of
             investments.

             Net cash provided by (used in) financing activities was $52.1
             million and $(1.3) million for the nine month periods ended
             September 30, 1998 and 1997, respectively. Cash provided by
             financing activities resulted from the completion of the $90
             million 11% Senior Notes offering during the current period. Cash
             generated from the 11% Senior Notes offering was used to prepay
             indebtedness of the Company, pay the promissory note to the former
             owner of John Bludworth Marine, and pay the remainder of the
             financing costs related to the 11% Senior Notes offering.

             Management believes that with the remaining proceeds from the 11%
             Senior Notes offering, cash generated from operations, and, if
             necessary, borrowings under the Company's lines of credit, the
             Company will have sufficient resources available to meet its
             anticipated requirements for capital expenditures and working
             capital needs through the remainder of fiscal year 1998.

             Year 2000 Computer Issue

             Many computer systems in use today were designed and developed
             using two digits, rather than four, to specify the year. As a
             result, such systems will recognize the year 2000 as "00". This
             could cause many computer applications to fail completely or to
             create erroneous results unless corrective measures are taken.

             The Company currently believes that with recent upgrades made to
             its existing software, the Year 2000 problem will not pose
             significant operations problems for the Company's computer systems.
             The Company has initiated discussions with its significant
             suppliers, large customers, financial institutions and utilities to
             assure that those parties have appropriate plans to remediate Year
             2000 issues. The Company expects to have completed its
             communications with those third parties by the end of the year so
             that it will be in a position to work with them to minimize
             disruption to the Company's operations as a result of others' Year
             2000 problems.

                                       14
<PAGE>   17

                           PART II: OTHER INFORMATION

Item 1.      Legal Proceedings.

             On August 13, 1998, one of the Company's subsidiaries, Newpark
             Shipbuilding-Brady Island, Inc., was the subject of a search
             warrant executed by a multi-agency environmental task force. The
             government's search warrant was primarily directed at the
             facility's wastewater treatment plant. The Company's stated policy
             is to comply with all government laws and regulations and to
             operate with the highest degree of integrity. The Board of
             Directors of the Company has authorized outside legal counsel to
             conduct an internal corporate investigation of the matters raised
             by the agencies in their investigation. The investigation has not
             been completed at this time. Therefore, at this time the Company
             cannot now estimate the impact that may result from enforcement
             action, if any, related to the government's investigation, or any
             other issues that may be raised in connection with the company's
             internal investigation.

Item 2.      Use of Proceeds.

             The Company completed an offering of $90 million of 11% Senior
             Notes on February 2, 1998. The underwriter was Schroder & Co., Inc.

             Expenses incurred by the Company in connection with the senior
             notes offering were as follows (in thousands):

                Underwriting discounts and commissions               $ 3,150
                Legal and accounting fees                                637
                Printing                                                 252
                Other                                                    363
                                                                    --------
                                                                    $  4,402
                                                                    ========

             From February 2, 1998 through September 30, 1998, the Company used
             offering proceeds as follows (in thousands):

                John Bludworth Marine, Inc. acquisition              $15,000
                Pledged securities - first year's interest             9,542
                Repayment of indebtedness, including
                   prepayment penalties                               25,172
                Payment of promissory note to former owner
                   of John Bludworth Marine, Inc.                     10,853
                BBD-GSC acquisition                                    5,503
                Capital expenditures                                  16,863
                Expenses of offering (see above)                       4,402
                                                                     -------
                Total proceeds expended                              $87,335
                                                                     =======

                                       15
<PAGE>   18

             The remaining proceeds of approximately $2.7 million are included
             in cash and cash equivalents at September 30, 1998 and are
             scheduled to be used to cover a portion of the budgeted capital
             expenditures.

Item 3-5.    Not applicable.

Item 6.      Exhibits and reports on Form 8-K.

             (a)  Exhibits

                  Exhibit
                  Number        Description
                  -------       -----------
                    27.1        Financial Data Schedule.

                                *  Filed herewith

             (b)  Reports on Form 8-K

                  On May 29, 1998, the Company filed a report on Form 8-K
                  relating to the acquisition of certain assets of the Barge
                  Building Division of Galveston Shipbuilding Company, as
                  amended by report on Form 8-K/A filed on July 29, 1998.

                                       16
<PAGE>   19

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.


                                            FIRST WAVE MARINE, INC.

November 13, 1998                           By: /s/ DAVID B. AMMONS
                                                ------------------------  
                                                David B. Ammons
                                                Executive Vice President and
                                                Chief Financial Officer

November 13, 1998                           By: /s/ DALE E. SCHEXNAYDER
                                                -------------------------
                                                Dale E. Schexnayder
                                                Corporate Controller

  
                                     17
<PAGE>   20

                               INDEX TO EXHIBITS


EXHIBIT             
NUMBER                        DESCRIPTION
--------       -------------------------------------------
*27.1      -   Financial Data Schedule