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<SEC-DOCUMENT>0000891092-06-001055.txt : 20060426
<SEC-HEADER>0000891092-06-001055.hdr.sgml : 20060426
<ACCEPTANCE-DATETIME>20060426091102
ACCESSION NUMBER:		0000891092-06-001055
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060426
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060426
DATE AS OF CHANGE:		20060426

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MARINE PRODUCTS CORP
		CENTRAL INDEX KEY:			0001129155
		STANDARD INDUSTRIAL CLASSIFICATION:	SHIP & BOAT BUILDING & REPAIRING [3730]
		IRS NUMBER:				582572419
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-16263
		FILM NUMBER:		06779628

	BUSINESS ADDRESS:	
		STREET 1:		2170 PIEDMONT ROAD NE
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30324
		BUSINESS PHONE:		4043212140

	MAIL ADDRESS:	
		STREET 1:		2170 PIEDMONT ROAD NE
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30324
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>e23912_8k.htm
<DESCRIPTION>8-K
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                                        SECURITIES AND EXCHANGE COMMISSION <BR>
                                              <font size="2">WASHINGTON, D.C. 20549 </font></B></FONT></P>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>FORM 8-K </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>CURRENT REPORT <BR>
                                      PURSUANT TO SECTION 13 OR 15(d) OF THE <BR>
                                          SECURITIES EXCHANGE ACT OF 1934 </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Date of Report (Date
of earliest event reported): April 26, 2006 </B></FONT></P>



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><B>MARINE PRODUCTS
CORPORATION<br>
  </B></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Exact name of
registrant as specified in its charter) </FONT></P>

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<pre>&nbsp;
</pre>
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  <tr>
    <td width="33%">
      <div align="center"><font size="2"><b>Delaware</b><br>
        (State or Other Jurisdiction<br>
      of Incorporation)

        </font></div>
    </td>
    <td width="33%">
      <div align="center"><font size="2"><b>1-16263</b><br>
        (Commission File Number)
        </font></div>
    </td>
    <td width="33%">
      <div align="center"><font size="2"><b>58-2572419</b><br>
        (IRS Employer <br>
        Identification No.)

        </font></div>
    </td>
  </tr>
</table>
<!-- MARKER FORMAT-SHEET="Center no bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2170 Piedmont Road, NE,
Atlanta, Georgia 30324                             <BR>    (Address of principal executive
office) (zip code) </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Registrant&#146;s
telephone number, including area code: (404) 321-7910 </B></FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2. below): </FONT></P>

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    <TD WIDTH=5%><font size=2>|<u>&nbsp;&nbsp;&nbsp;</u>|</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD>
</TR>
</TABLE>
<BR>

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    <TD WIDTH=5%><font size=2>|<u>&nbsp;&nbsp;&nbsp;</u>|</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD>
</TR>
</TABLE>
<BR>

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    <TD WIDTH=5%><font size=2>|<u>&nbsp;&nbsp;&nbsp;</u>|</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD>
</TR>
</TABLE>
<BR>

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<BR>&nbsp;
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</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 2.02  Results of
Operations and Financial Condition. </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On April 26, 2006, Marine Products
Corporation issued a press release entitled &#147;Marine Products Corporation Reports 2006
First Quarter Financial Results,&#148; that announced the financial results for the first
quarter ended March 31, 2006. </FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 9.01  Financial
Statements and Exhibits. </B></FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Exhibits. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibit
99 &#150; Press Release dated April 26, 2006. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SIGNATURES </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the requirements of the
Securities Exchange Act of 1934, Marine Products Corporation has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>
<table width=100% cellpadding=0 cellspacing=0>
  <tr valign=TOP>
    <td width=60%><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td width=40%><font size=2>Marine Products Corporation.
</font></td>
  </tr>
</table>
<br>

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    <td width=60%><font size=2>&nbsp; Date:  April 26, 2006</font></td>
    <td width=40%>
      <p><font size=2>
/s/ BEN M. PALMER
</font>
      <hr align="left" size="1" width="50%">

      <font size="2">Ben M. Palmer
<br>
Vice President, Chief Financial Officer and <br>Treasurer
</font>
    </td>
  </tr>
</table>
<br>
<br>
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<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>e23912ex_99.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Exhibit 99 </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Marine Products
Corporation Reports 2006 First Quarter Financial Results </U></B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ATLANTA, April 26, 2006 &#150; Marine
Products Corporation (NYSE: MPX) announced its unaudited results for the quarter ended
March 31, 2006. Marine Products Corporation is a leading manufacturer of fiberglass boats
under two brand names: sterndrive and inboard pleasure boats by Chaparral, including SSi
Sportboats, Sunesta Deckboats, and Signature Cruisers, and outboard sport fishing boats
by Robalo. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the quarter ended March 31,
2006, Marine Products generated net sales of $69,957,000, a 3.6 percent decrease compared
to $72,586,000 in the first quarter of last year. The change in net sales was comprised
of a 16.4 percent increase in the average gross selling price per boat, a 19.3 percent
decrease in the number of boats sold, and an increase in parts and accessories sales.
Gross profit for the quarter was $16,818,000, or 24.0 percent of net sales, compared to
$18,948,000, or 26.1 percent of net sales, in the prior year. The decrease in gross
profit as a percentage of net sales was primarily the result of higher raw materials
costs compared to the prior year. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operating income for the quarter was
$8,180,000, a 19.0 percent decrease compared to the first quarter last year, due to lower
gross profit, partially offset by slightly lower selling, general and administrative
expenses. Operating income was 11.7 percent of net sales for the quarter, compared to
13.9 percent in the prior year. Selling, general and administrative expenses decreased
due to the variable nature of many of these costs, and were 12.3 percent of net sales in
the first quarter of 2006 compared to 12.2 percent of net sales in the prior year. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net income for the quarter ended
March 31, 2006 was $5,776,000, a 15.3 percent decrease compared to $6,817,000 in the
prior year. Net income decreased due to lower operating income, partially offset by
increased interest income compared to the prior year, and a slightly lower tax rate.
Diluted earnings per share for the quarter were $0.15, a decrease of $0.02, or 11.8
percent, compared to the prior year. </FONT></P>








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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Richard A. Hubbell, Marine Products'
Chief Executive Officer, stated, "Our results for the first quarter of 2006 reflect the
decrease in demand that started at the end of the third quarter of 2005. As we stated
previously, we reduced our production in order to maintain appropriate levels of dealer
inventories and order backlog. We have accomplished this, and in light of a better than
expected winter boat show season, we have gradually increased our production during the
first quarter. We are also pleased with the reception of our new models for the 2006
model year. The acceptance of these new models by the dealer and consumer market is
reflected in the higher average gross selling prices that we realized during the quarter. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Page 2 <BR>1st Quarter 2006 Press Release </FONT></P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Hubbell continued, "Our order
backlog is higher than it was at this time last year, and our dealer inventories are
lower, indicating a healthy selling environment for our products. As we operate in the
height of the retail selling season, and prepare for our 2007 model introductions, we
continue to monitor dealer inventories, order backlog, and indications of consumer
sentiment regarding recreational boating." </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Marine Products Corporation (NYSE:
MPX) designs, manufactures and distributes premium-branded Chaparral sterndrive and
inboard pleasure boats and Robalo sport fishing boats, and seeks to continue to diversify
its product line through product innovation and strategic acquisition. With premium
brands, a solid capital structure, and a strong independent dealer network, Marine
Products Corporation is prepared to capitalize on opportunities to strategically increase
its market share and to generate superior financial performance to build long-term
shareholder value. For more information on Marine Products Corporation visit our website
at www.marineproductscorp.com. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain statements and information
included in this press release constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements
include statements regarding our belief that certain factors indicate a healthy selling
environment for our products, our ability to continue to diversify our product line
though product innovation and strategic acquisition, our ability to capitalize on
opportunities to increase market share, generate superior financial performance and build
shareholder value, dealer and retail buyer reaction to our new models, and our ability to
adjust production to maintain dealer inventories and backlog at appropriate levels. These
statements involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Marine Products Corporation to
be materially different from any future results, performance or achievements expressed or
implied in such forward-looking statements. These risks include possible decreases in the
level of consumer confidence impacting discretionary spending, business interruptions due
to adverse weather conditions, increased interest rates, unanticipated changes in
consumer demand and preferences, deterioration in the quality of Marine Products' network
of independent boat dealers or availability of financing of their inventory, our ability
to insulate our financial results against increasing commodity prices, our ability to
identify, complete or successfully integrate acquisitions, the impact of rising gasoline
prices on consumer demand for our products, and competition from other boat manufacturers
and dealers. Additional discussion of factors that could cause the actual results to
differ materially from management's projections, forecasts, estimates and expectations is
contained in Marine Products' Form 10-K for the year ending December 31, 2005 filed with
the Securities and Exchange Commission. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Page 3 <BR>1st Quarter 2006 Press Release </FONT></P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For information about Marine
Products Corporation, please contact: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BEN M. PALMER <BR>Chief Financial
Officer <BR>404.321.7910 <BR>irdept@marineproductscorp.com </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>JIM LANDERS<BR> Corporate Finance
<BR>404.321.2162<BR> jlanders@marineproductscorp.com </FONT></P>

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  <p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="640">
    <tr>
      <td valign=top colspan="7"><font size="2"><b>MARINE PRODUCTS CORPORATION AND SUBSIDIARIES</b> </font></td>
    </tr>
    <tr>
      <td valign=top colspan="7">&nbsp;</td>
    </tr>
    <tr>
      <td valign=top colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>
    <tr>
      <td valign=top colspan="7"><font size="2"><b>CONSOLIDATED STATEMENTS OF INCOME</b><i> (In thousands except per share
data)</i> </font></td>
    </tr>
    <tr valign="bottom">
      <td colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>

    <tr valign="bottom">
      <td><font size="2">Periods ended March 31, (Unaudited) </font></td>
      <td colspan="4">
        <div align="center"><font size="2"><b>First
Quarter</b> </font></div>
      </td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>
    <tr valign="bottom">
      <td>
        <div align="center"></div>
      </td>
      <td colspan="2">
        <div align="center"><b><font size="2">2006 </font></b></div>
      </td>
      <td colspan="2">
        <div align="center"><font size="2">2005 </font></div>
      </td>
      <td colspan="2">
        <div align="center"><font size="2">%
BETTER <br>
         (WORSE) </font></div>
      </td>
    </tr>
    <tr>
      <td valign=top colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2"><b>Net Sales</b> </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">$69,957 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">$72,586 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">(3.6 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">)% </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">Cost of
  Goods Sold </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">53,139 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">53,638 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">0.9 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">Gross
  Profit </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">16,818 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">18,948 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">(11.2 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">) </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">Selling,
  General and Administrative Expenses </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">8,638 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">8,847 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">2.4 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">Operating
  Income </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">8,180 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">10,101 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">(19.0 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">) </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">Interest
  Income </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">446 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">291 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">53.3 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">Income
  Before Income Taxes </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">8,626 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">10,392 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">(17.0 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">) </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">Income
  Tax Provision </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">2,850 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">3,575 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">20.3 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top colspan="7">
        <hr noshade align="center" size="1">
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2"><b>NET
  INCOME</b> </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">$5,776 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">$6,817 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">(15.3 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">)% </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top colspan="7">
        <hr noshade align="center" size="2">
      </td>
    </tr>


    <tr>
      <td valign=top>
        <p><font size="2"><b>EARNINGS
  PER SHARE</b> </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">&nbsp;&nbsp;Basic </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">$0.15 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">$0.18 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">(16.7 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">)% </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>&nbsp;</td>
      <td valign=top align="right" colspan="6">
        <hr noshade align="center" size="2">
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">&nbsp;&nbsp;Diluted </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">$0.15 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">$0.17 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">(11.8 </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">)% </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>&nbsp;</td>
      <td valign=top align="right" colspan="6">
        <hr noshade align="center" size="2">
      </td>
    </tr>

    <tr>
      <td valign=top>
        <p><font size="2"><b>AVERAGE
  SHARES OUTSTANDING</b> </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">&nbsp;&nbsp;Basic </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">37,309 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">38,602 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>&nbsp;</td>
      <td valign=top align="right" colspan="4">
        <hr noshade align="center" size="2">
      </td>
      <td valign=top align="right">&nbsp;</td>
      <td valign=top align="left">&nbsp;</td>
    </tr>
    <tr>
      <td valign=top>
        <p><font size="2">&nbsp;&nbsp;Diluted </font></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">39,091 </font></b></p>
      </td>
      <td valign=top align="right">
        <p><b><font size="2">&nbsp; </font></b></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">40,930 </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="right">
        <p><font size="2">&nbsp; </font></p>
      </td>
      <td valign=top align="left">
        <p><font size="2">&nbsp; </font></p>
      </td>
    </tr>
    <tr>
      <td valign=top>&nbsp;</td>
      <td valign=top align="right" colspan="4">
        <hr noshade align="center" size="2">
      </td>
      <td valign=top align="right">&nbsp;</td>
      <td valign=top align="left">&nbsp;</td>
    </tr>
  </table>


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<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





<!-- *************************************************************************** -->
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<p>

<table border=0 cellspacing=0 cellpadding=0 width="640">
    <tr valign="bottom" align="left">

    <td colspan="5"><font size="2"><b>MARINE
PRODUCTS CORPORATION AND SUBSIDIARIES</b></font></td>
    </tr>
    <tr valign="bottom" align="left">

    <td colspan="5">&nbsp;</td>
    </tr>
    <tr valign="bottom" align="left">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom" align="left">

    <td colspan="5">
        <div align="left"><font size="2"><b>CONSOLIDATED
BALANCE SHEETS</b></font></div>
      </td>
    </tr>
    <tr valign="bottom" align="center">

    <td align="left" colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom" align="center">

    <td align="left">
        <font size="2">At March
31, (Unaudited)</font>
      </td>
    <td colspan="4">
        <font size="2"> (in
thousands)</font>
      </td>
    </tr>

    <tr valign="bottom" align="center">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom" align="center">

    <td>
        <div align="center"></div>
      </td>

    <td colspan="2">
        <div align="center"><b><font size="2">2006</font></b></div>
      </td>

    <td colspan="2">
        <div align="center"><b><font size="2">2005</font></b></div>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>


    <tr valign="bottom">

    <td>
        <p><b><font size="2">ASSETS</font></b></p>
      </td>

    <td>
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td>
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td>
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td>
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Cash and
  cash equivalents</font></p>
      </td>

    <td align="right">
        <p><font size="2">$&nbsp;&nbsp;44,350</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">$&nbsp;&nbsp;49,161</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Marketable
  securities</font></p>
      </td>

    <td align="right">
        <p><font size="2">1,681</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">2,686</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Accounts
  receivable, net</font></p>
      </td>

    <td align="right">
        <p><font size="2">5,836</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">4,588</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Inventories</font></p>
      </td>

    <td align="right">
        <p><font size="2">28,596</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">29,189</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Income
  taxes receivable</font></p>
      </td>

    <td align="right">
        <p><font size="2">989</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">275</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Deferred
  income taxes</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,079</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,169</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Prepaid
  expenses and other current assets</font></p>
      </td>

    <td align="right">
        <p><font size="2">1,461</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">1,816</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">&nbsp;&nbsp;Total
  current assets</font></p>
      </td>

    <td align="right">
        <p><font size="2">85,992</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">90,884</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Property,
  plant and equipment, net</font></p>
      </td>

    <td align="right">
        <p><font size="2">17,154</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">17,968</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Goodwill</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,308</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,308</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Marketable
  securities</font></p>
      </td>

    <td align="right">
        <p><font size="2">5,573</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">5,911</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Deferred
  income taxes</font></p>
      </td>

    <td align="right">
        <p><font size="2">1,263</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">&#151;</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Other
  assets</font></p>
      </td>

    <td align="right">
        <p><font size="2">5,042</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,819</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">&nbsp;&nbsp;Total
  assets</font></p>
      </td>

    <td align="right">
        <p><font size="2">$118,332</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">$121,890</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="2">
      </td>
    </tr>

    <tr valign="bottom">

    <td>&nbsp;</td>

    <td align="right">&nbsp;</td>

    <td align="left">&nbsp;</td>

    <td align="right">&nbsp;</td>

    <td align="left">&nbsp;</td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2"><b>LIABILITIES
  AND STOCKHOLDERS' EQUITY</b></font></p>
      </td>

    <td align="right">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Accounts
  payable</font></p>
      </td>

    <td align="right">
        <p><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;8,366</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;8,094</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Accrued
  expenses and other liabilities</font></p>
      </td>

    <td align="right">
        <p><font size="2">12,370</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">15,095</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">&nbsp;&nbsp;Total
  current liabilities</font></p>
      </td>

    <td align="right">
        <p><font size="2">20,736</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">23,189</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Pension
  liabilities</font></p>
      </td>

    <td align="right">
        <p><font size="2">4,506</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,424</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Deferred
  income taxes</font></p>
      </td>

    <td align="right">

      <p><font size="2">&#151;</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">745</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Other
  long-term liabilities</font></p>
      </td>

    <td align="right">
        <p><font size="2">1,121</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">1,709</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">&nbsp;&nbsp;Total
  liabilities</font></p>
      </td>

    <td align="right">
        <p><font size="2">26,363</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">29,067</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Common
  stock</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,804</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">3,920</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Capital
  in excess of par value</font></p>
      </td>

    <td align="right">
        <p><font size="2">13,163</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">36,722</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Retained
  earnings</font></p>
      </td>

    <td align="right">
        <p><font size="2">76,102</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">57,317</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Deferred
  compensation</font></p>
      </td>

    <td align="right">
        <p><font size="2">&#151;</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">(4,197</font></p>
      </td>

    <td align="left">
        <p><font size="2">)</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">Accumulated
  other comprehensive loss</font></p>
      </td>

    <td align="right">
        <p><font size="2">(1,100</font></p>
      </td>

    <td align="left">
        <p><font size="2">)</font></p>
      </td>

    <td align="right">
        <p><font size="2">(939</font></p>
      </td>

    <td align="left">
        <p><font size="2">)</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Total
  stockholders&#146; equity</font></p>
      </td>

    <td align="right">
        <p><font size="2">91,969</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">92,823</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">

    <td>
        <p><font size="2">&nbsp;&nbsp;Total
  liabilities and stockholders&#146; equity</font></p>
      </td>

    <td align="right">
        <p><font size="2">$118,332</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>

    <td align="right">
        <p><font size="2">$121,890</font></p>
      </td>

    <td align="left">
        <p><font size="2">&nbsp;</font></p>
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">
        <hr noshade size="2">
      </td>
    </tr>
    <tr valign="bottom">

    <td colspan="5">&nbsp;</td>
    </tr>
    <tr valign="bottom">

    <td colspan="5"><font size="2">Certain
prior year balances have been reclassified to conform with current year
presentation.</font>

      </td>
    </tr>
  </table>

<!-- MARKER FORMAT-SHEET="Page Break CENTER" FSL="Workstation" -->
<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 7; page: 7" -->




  <p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="640">

  <tr valign="bottom">

    <td colspan="6"><font size="2"><b>MARINE
PRODUCTS CORPORATION AND SUBSIDIARIES</b></font></td>
  </tr>

  <tr valign="bottom">

    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center" colspan="2">&nbsp;</td>
    <td align="center" colspan="2">&nbsp;</td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td><font size="2"><b>CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS</b></font></td>
    <td>&nbsp;</td>
    <td align="center" colspan="2">&nbsp;</td>
    <td align="center" colspan="2">&nbsp;</td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td><font size="2"><b>THREE MONTHS
ENDED MARCH 31, </b>(Unaudited)</font></td>
    <td>&nbsp;</td>
    <td align="center" colspan="4"><font size="2">(in thousands)</font></td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><i><font size="2">&nbsp;</font></i></p>
    </td>
    <td>

      <p><i><font size="2">&nbsp;</font></i></p>
    </td>
    <td align="center" colspan="2">

      <p><i><b><font size="2">2006</font></b></i></p>
    </td>
    <td align="center" colspan="2">

      <p><i><font size="2">2005</font></i></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>


  <tr valign="bottom">

    <td>

      <p><font size="2"><b>Operating
  Activities:</b></font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Net
  income</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">$&nbsp;&nbsp;5,776</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">$&nbsp;&nbsp;6,817</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Depreciation,
  amortization and other non-cash charges</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">909</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">735</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Other net
  changes in operating activities</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">2,411</font></b></p>
    </td>
    <td align="left">

      <p>&nbsp;</p>
    </td>
    <td align="right">

      <p><font size="2">(1,027</font></p>
    </td>
    <td align="left">

      <p><font size="2">)&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net cash
  provided by operating activities</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">9,096</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">6,525</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>


  <tr valign="bottom">

    <td>

      <p><font size="2"><b>Investing
  Activities:</b></font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Capital
  expenditures</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">(430</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
    <td align="right">

      <p><font size="2">(163</font></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Other
  investing activities</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">(45</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
    <td align="right">

      <p><font size="2">(2,319</font></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan="6">
      <hr noshade size="1">
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net cash
  used for investing activities</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">(475</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
    <td align="right">

      <p><font size="2">(2,482</font></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan="6">
      <hr noshade size="1">
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2"><b>Financing
  Activities:</b></font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Payment
  of dividends</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">(1,864</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
    <td align="right">

      <p><font size="2">(1,541</font></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Cash paid
  for common stock purchased and retired</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">(275</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
    <td align="right">

      <p><font size="2">(45</font></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;Other
  financing activities</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">266</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">89</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net cash
  used for financing activities</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">(1,873</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
    <td align="right">

      <p><font size="2">(1,497</font></p>
    </td>
    <td align="left">

      <p><font size="2">)</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>


  <tr valign="bottom">

    <td>

      <p><font size="2">Net
  increase in cash and cash equivalents</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">6,748</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">2,546</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2">Cash and
  cash equivalents at beginning of period</font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">37,602</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">46,615</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="1">
      </td>
  </tr>

  <tr valign="bottom">

    <td>

      <p><font size="2"><b>Cash and
  cash equivalents at end of period</b></font></p>
    </td>
    <td>

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><b><font size="2">$44,350</font></b></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
    <td align="right">

      <p><font size="2">$49,161</font></p>
    </td>
    <td align="left">

      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>

  <tr valign="bottom">

    <td colspan="6">

      <hr noshade size="2">
      </td>
  </tr>

</table>


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