MARINE PRODUCTS CORP

Quarterly Report • May 1, 2008

10-Q 1 t62575_10q.htm FORM 10-Q t62575_10q.htm Licensed to: tsf Document Created using EDGARizer 4.0.5.0 Copyright 1995 - 2008 EDGARfilings, Ltd., an IEC company. All rights reserved

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2008

Commission File No. 1-16263

MARINE PRODUCTS CORPORATION

(exact name of registrant as specified in its charter)

Delaware	58-2572419
(State
or other jurisdiction of incorporation or organization)	(I.R.S.
Employer Identification Number)

2801 Buford Highway, Suite 520, Atlanta, Georgia 30329

(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code -- (404) 321-7910

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 _ _

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes__ No X

As of April 22, 2008, Marine Products Corporation had 36,435,808 shares of common stock outstanding.

Marine Products Corporation

Table of Contents

| Part
I. Financial Information | | Page No. |
| --- | --- | --- |
| Item
1. | Financial
Statements (Unaudited) | |
| | Consolidated
Balance Sheets – As of March 31, 2008 and December 31,
2007 | 3 |
| | Consolidated
Statements of Income – for the three months ended March 31, 2008 and
2007 | 4 |
| | Consolidated
Statement of Stockholders’ Equity – for the three months ended March 31,
2008 | 5 |
| | Consolidated
Statements of Cash Flows – for the three months ended March 31, 2008 and
2007 | 6 |
| | Notes
to Consolidated Financial Statements | 7-16 |
| Item
2. | Management’s
Discussion and Analysis of Financial Condition and Results of
Operations | 17 |
| Item
3. | Quantitative
and Qualitative Disclosures About Market Risk | 25 |
| Item
4. | Controls
and Procedures | 25 |
| Part
II. Other Information | | |
| Item
1. | Legal
Proceedings | 26 |
| Item
1A. | Risk
Factors | 26 |
| Item
2. | Unregistered
Sales of Equity Securities and Use of Proceeds | 27 |
| Item
3. | Defaults
upon Senior Securities | 27 |
| Item
4. | Submission
of Matters to a Vote of Security Holders | 28 |
| Item
5. | Other
Information | 28 |
| Item
6. | Exhibits | 28 |
| Signatures | | 29 |

2

| MARINE
PRODUCTS CORPORATION AND SUBSIDIARIES | | |
| --- | --- | --- |
| PART
I. FINANCIAL INFORMATION | | |
| ITEM
1. FINANCIAL STATEMENTS | | |
| CONSOLIDATED
BALANCE SHEETS | | |
| AS
OF MARCH 31, 2008 AND DECEMBER 31, 2007 | | |
| (In
thousands) | | |
| (Unaudited) | | |
| | March
31, | December
31, |
| | 2008 | 2007 |
| ASSETS | | |
| Cash
and cash equivalents | $ 8,130 | $ 3,233 |
| Marketable
securities | 10,171 | 8,870 |
| Accounts
receivable, net | 4,346 | 3,540 |
| Inventories | 32,412 | 33,159 |
| Income
taxes receivable | 725 | 1,321 |
| Deferred
income taxes | 2,843 | 2,746 |
| Prepaid
expenses and other current assets | 1,925 | 2,159 |
| Total
current assets | 60,552 | 55,028 |
| Property,
plant and equipment, net | 15,622 | 15,944 |
| Goodwill | 3,308 | 3,308 |
| Marketable
securities | 38,798 | 36,087 |
| Deferred
income taxes | 1,372 | 1,098 |
| Other
assets | 7,112 | 7,261 |
| Total
assets | $ 126,764 | $ 118,726 |
| LIABILITIES
AND STOCKHOLDERS' EQUITY | | |
| Accounts
payable | $ 6,967 | $ 4,621 |
| Accrued
expenses | 18,778 | 14,294 |
| Total
current liabilities | 25,745 | 18,915 |
| Pension
liabilities | 5,467 | 5,572 |
| Other
long-term liabilities | 488 | 482 |
| Total
liabilities | 31,700 | 24,969 |
| Common
stock | 3,644 | 3,602 |
| Capital
in excess of par value | - | - |
| Retained
earnings | 91,184 | 90,105 |
| Accumulated
other comprehensive income | 236 | 50 |
| Total
stockholders' equity | 95,064 | 93,757 |
| Total
liabilities and stockholders' equity | $ 126,764 | $ 118,726 |
| The
accompanying notes are an integral part of these consolidated
statements. | | |

3

| MARINE
PRODUCTS CORPORATION AND SUBSIDIARIES | | |
| --- | --- | --- |
| CONSOLIDATED STATEMENTS OF INCOME | | |
| FOR
THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 | | |
| (In
thousands except per share data) | | |
| (Unaudited) | | |
| | Three
months ended March 31, | |
| | 2008 | 2007 |
| Net
sales | $ 65,542 | $ 64,976 |
| Cost
of goods sold | 52,078 | 51,012 |
| Gross
profit | 13,464 | 13,964 |
| Selling,
general and administrative expenses | 8,259 | 8,443 |
| Operating
income | 5,205 | 5,521 |
| Interest
income | 563 | 726 |
| Income
before income taxes | 5,768 | 6,247 |
| Income
tax provision | 1,636 | 2,330 |
| Net
income | $ 4,132 | $ 3,917 |
| Earnings
per share | | |
| Basic | $ 0.12 | $ 0.10 |
| Diluted | $ 0.11 | $ 0.10 |
| Dividends
per share | $ 0.065 | $ 0.060 |
| Average
shares outstanding | | |
| Basic | 35,728 | 37,500 |
| Diluted | 36,504 | 38,819 |
| The
accompanying notes are an integral part of these consolidated
statements. | | |

4

| MARINE
PRODUCTS CORPORATION AND SUBSIDIARIES | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY | | | | | | | | | | | | |
| FOR
THE THREE MONTHS ENDED MARCH 31, 2008 | | | | | | | | | | | | |
| (In
thousands) | | | | | | | | | | | | |
| (Unaudited) | | | | | | | | | | | | |
| | | | | | | | | | Accumulated | | | |
| | | | | | Capital
in | | | | Other | | | |
| | Comprehensive | Common
Stock | | | Excess
of | | Retained | | Comprehensive | | | |
| | Income
(Loss) | Shares | Amount | | Par | | Earnings | | Income | | Total | |
| Balance,
December 31, 2007 | | 36,018 | $ | 3,602 | $ | - | $ | 90,105 | $ | 50 | $ 93,757 | |
| Stock
issued for stock incentive plans, net | | 861 | | 86 | | 1,965 | | — | | — | 2,051 | |
| Stock
purchased and retired | | (443 | ) | (44 | ) | (2,921 | ) | (714 | ) | — | (3,679 | ) |
| Net
income | $ 4,132 | — | | — | | — | | 4,132 | | — | 4,132 | |
| Unrealized
gain on securities, net of taxes and reclassification
adjustments | 186 | — | | — | | — | | — | | 186 | 186 | |
| Comprehensive
income | $ 4,318 | | | | | | | | | | | |
| Dividends
declared | | — | | — | | — | | (2,339 | ) | — | (2,339 | ) |
| Stock-based
compensation | | — | | — | | 374 | | — | | — | 374 | |
| Excess
tax benefits for share- based payments | | — | | — | | 582 | | — | | — | 582 | |
| Balance,
March 31, 2008 | | 36,436 | $ | 3,644 | $ | — | $ | 91,184 | $ | 236 | $ 95,064 | |
| The
accompanying notes are an integral part of these
statements. | | | | | | | | | | | | |

5

| MARINE
PRODUCTS CORPORATION AND SUBSIDIARIES | | | | |
| --- | --- | --- | --- | --- |
| CONSOLIDATED
STATEMENTS OF CASH FLOWS | | | | |
| FOR
THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 | | | | |
| (In
thousands) | | | | |
| (Unaudited) | | | | |
| | Three
months ended March 31, | | | |
| | 2008 | 2007 | | |
| OPERATING
ACTIVITES | | | | |
| Net
income | $ 4,132 | $ | 3,917 | |
| Adjustments
to reconcile net income to net cash | | | | |
| provided
by operating activities: | | | | |
| Depreciation
and amortization | 451 | | 524 | |
| Stock-based
compensation expense | 374 | | 373 | |
| Excess
tax benefits for share-based payments | (582 | ) | (371 | ) |
| Deferred
income tax (benefit) provision | (580 | ) | 56 | |
| (Increase)
decrease in assets: | | | | |
| Accounts
receivable | (806 | ) | (1,161 | ) |
| Inventories | 747 | | (1,810 | ) |
| Prepaid
expenses and other current assets | 234 | | 948 | |
| Income
taxes receivable | 1,178 | | (474 | ) |
| Other
non-current assets | 149 | | (526 | ) |
| Increase
(decrease) in liabilities: | | | | |
| Accounts
payable | 2,346 | | 3,432 | |
| Other
accrued expenses | 4,484 | | 1,388 | |
| Other
long-term liabilities | (99 | ) | (20 | ) |
| Net
cash provided by operating activities | 12,028 | | 6,276 | |
| INVESTING
ACTIVITIES | | | | |
| Capital
expenditures | (129 | ) | (518 | ) |
| Purchases
of marketable securities | (11,647 | ) | (1 | ) |
| Sales
of marketable securities | 6,923 | | 172 | |
| Maturities
of marketable securities | 1,000 | | 115 | |
| Net
cash used for investing activities | (3,853 | ) | (232 | ) |
| FINANCING
ACTIVITIES | | | | |
| Payment
of dividends | (2,339 | ) | (2,296 | ) |
| Excess
tax benefits for share-based payments | 582 | | 371 | |
| Cash
paid for common stock purchased and retired | (1,558 | ) | (2,392 | ) |
| Proceeds
received upon exercise of stock options | 37 | | 52 | |
| Net
cash used for financing activities | (3,278 | ) | (4,265 | ) |
| Net
increase in cash and cash equivalents | 4,897 | | 1,779 | |
| Cash
and cash equivalents at beginning of period | 3,233 | | 54,456 | |
| Cash
and cash equivalents at end of period | $ 8,130 | $ | 56,235 | |
| The
accompanying notes are an integral part of these consolidated
statements. | | | | |

6

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 1. |
| --- |
| The
accompanying unaudited condensed financial statements have been prepared
in accordance with accounting principles generally accepted in the United
States of America for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management,
all adjustments (all of which consisted of normal recurring accruals)
considered necessary for a fair presentation have been
included. Operating results for the three months ended March
31, 2008 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2008. |
| The
balance sheet at December 31, 2007 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. |
| For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 2007. |

7

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 2. |
| --- |
| Statement
of Financial Accounting Standard (“SFAS”) 128, “Earnings Per Share,”
requires a basic earnings per share and diluted earnings per share
presentation. The two calculations differ as a result of the dilutive
effect of stock options and time lapse restricted shares and performance
restricted shares included in diluted earnings per share, but excluded
from basic earnings per share. Basic and diluted earnings per share are
computed by dividing net income by the weighted average number of shares
outstanding during the respective periods. A reconciliation of
weighted average shares outstanding is as
follows: |

| (in
thousands except per share data amounts) | Three
months ended March
31, | |
| --- | --- | --- |
| | 2008 | 2007 |
| Net
income | $ 4,132 | $ 3,917 |
| (numerator
for basic and diluted earnings per share) | | |
| Shares
(denominator): | | |
| Weighted
average shares outstanding | 35,728 | 37,500 |
| (denominator
for basic earnings per share) | | |
| Dilutive
effect of stock options and restricted shares | 776 | 1,319 |
| Adjusted
weighted average shares outstanding | 36,504 | 38,819 |
| (denominator
for diluted earnings per share) | | |
| Earnings
Per Share: | | |
| Basic | $ 0.12 | $ 0.10 |
| Diluted | $ 0.11 | $ 0.10 |

The effect of certain stock options as shown below were excluded in the computation of weighted average shares outstanding because the effect of their inclusion would be anti-dilutive to earnings per share:

| (in
thousands) | Three
months ended March 31, | |
| --- | --- | --- |
| | 2008 | 2007 |
| Stock
options | 47 | 48 |

8

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 3. |
| --- |
| In
March 2008, the FASB issued SFAS 161, “Disclosures about Derivative
Instruments and Hedging Activities - an Amendment of FASB Statement 133.”
SFAS 161 requires enhanced disclosures regarding how: ( a ) an entity uses
derivative instruments; ( b ) derivative
instruments and related hedged items are accounted for under FASB
Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities ; and ( c ) derivative
instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. Statement 161 is
effective for fiscal years and interim periods beginning after November
15, 2008 with early application being encouraged. The Company
does not have any derivative instruments nor is currently involved in
hedging activities and therefore adoption of SFAS 161 is not expected to
have a material impact on the Company’s consolidated financial
statements. |
| In
February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-1,
“Application of FASB Statement No. 157 to FASB Statement No. 13 and Other
Accounting Pronouncements that Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13,” and
FSP FAS 157-2, “Effective Date of FASB Statement No. 157.” These
FSPs: |
| ● Exclude
certain leasing transactions accounted for under FASB Statement No. 13, Accounting for
Leases, from the scope of Statement 157. The exclusion does not
apply to fair value measurements of assets and liabilities recorded as a
result of a lease transaction but measured pursuant to other
pronouncements within the scope of Statement 157. |
| ● Defer
the effective date in FASB Statement No. 157, Fair Value
Measurements, for one year for certain nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at
fair value in the financial statements on a recurring basis (at least
annually). |
| FSP
FAS 157-1 is effective upon the initial adoption of Statement
157. FSP FAS 157-2 is effective February 12,
2008. The Company has adopted the provisions of FSP 157-1 and
157-2 in the first quarter of 2008. |

9

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 4. |
| --- |
| The
components of comprehensive income are as
follows: |

| (in
thousands) | Three
months ended
March 31, | |
| --- | --- | --- |
| | 2008 | 2007 |
| Net
income as reported | $ 4,132 | $ 3,917 |
| Change
in unrealized gain on marketable securities, net of taxes
and reclassification
adjustments | 186 | 10 |
| Comprehensive
income | $ 4,318 | $ 3,927 |

| 5. |
| --- |
| Pre-tax
cost of stock-based employee compensation was approximately $374,000
($253,000 after tax) for the three months ended March 31, 2008, and
approximately $373,000 ($263,000 after tax) for the three months ended
March 31, 2007. |
| Stock
Options |
| Transactions
involving Marine Products stock options for the three months ended March
31, 2008 were as follows: |

| Outstanding
at January 1, 2008 | 1,670,124 | | Weighted Average Exercise Price — $ 3.03 | Weighted Average Remaining
Contractual Life — 3.1
years | Aggregate Intrinsic Value |
| --- | --- | --- | --- | --- | --- |
| Granted | - | | - | N/A | |
| Exercised | (665,027 | ) | $ 3.22 | N/A | |
| Forfeited | (1,200 | ) | 1.65 | N/A | |
| Expired | - | | - | N/A | |
| Outstanding
at March 31, 2008 | 1,003,897 | | $ 2.89 | 3.3
years | $ 5,210,223 |
| Exercisable
at March 31, 2008 | 994,447 | | $ 2.80 | 3.2
years | $ 5,250,680 |

The total intrinsic value of share options exercised was approximately $3,496,000 during the three months ended March 31, 2008 and approximately $2,083,000 during the three months ended March 31, 2007. Tax benefits associated with the exercise of non-qualified stock options during the three months ended March 31, 2008 were approximately $561,000. There were no recognized excess tax benefits associated with the exercise of stock options during the three months ended March 31, 2007, since all of the options exercised were incentive stock options which do not generate tax deductions for the Company.

10

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| Restricted
Stock |
| --- |
| The
following is a summary of the changes in non-vested restricted shares for
the three months ended March 31,
2008: |

| Non-vested
shares at January 1, 2008 | 525,350 | | Weighted Average Grant- Date
Fair Value — $ 11.15 |
| --- | --- | --- | --- |
| Granted | 194,000 | | $ 7.08 |
| Vested | (79,100 | ) | $ 9.79 |
| Forfeited | (2,000 | ) | $ 11.24 |
| Non-vested
shares at March 31, 2008 | 638,250 | | $ 10.02 |

| The
total fair value of shares vested was approximately $651,000 during the
three months ended March 31, 2008 and $1,829,000 during the three months
ended March 31, 2007. The tax benefits for compensation tax
deductions in excess of compensation expense were credited to capital in
excess of par value and are classified as financing cash flows in
accordance with SFAS 123R. |
| --- |
| Other
Information |
| As
of March 31, 2008, total unrecognized compensation cost related to
non-vested restricted shares was approximately $5,412,000. This
cost is expected to be recognized over a weighted-average period of 4.2
years. As of March 31, 2008, total unrecognized compensation
cost related to non-vested stock options was approximately $96,000 and is
expected to be recognized over a weighted average period of one
year. |

11

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 6. |
| --- |
| Marine
Products maintains investments held with a large, well-capitalized
financial institution. Management determines the appropriate
classification of debt securities at the time of purchase and reevaluates
such designations as of each balance sheet date. Debt
securities are classified as available-for-sale because the Company does
not have the intent to hold the securities to
maturity. Available-for-sale securities are stated at their
fair values, with the unrealized gains and losses, net of tax, reported as
a separate component of stockholders’ equity. The cost of
securities sold is based on the specific identification
method. Realized gains and losses, declines in value judged to
be other than temporary, interest and dividends on available-for-sale
securities are included in interest income. The fair value and
the unrealized gains (losses) of the available-for-sale securities are as
follows: |

| (in
thousands) — Type
of Securities | March
31, 2008 — Fair
Value | Unrealized
Gain (Loss) | December
31, 2007 — Fair
Value | Unrealized
Gain (Loss) |
| --- | --- | --- | --- | --- |
| Municipal
Obligations | $ 48,969 | $ 689 | $ 44,957 | $ 405 |

| | Investments
with remaining maturities of less than 12 months are considered to be
current marketable securities. Investments with remaining
maturities greater than 12 months are considered to be non-current
marketable securities. |
| --- | --- |
| 7. | WARRANTY
COSTS AND OTHER CONTINGENCIES |
| | Warranty
Costs |
| | The
Company warrants the entire boat, excluding the engine, against defects in
materials and workmanship for a period of one year. The Company
also warrants the entire deck and hull, including its bulkhead and
supporting stringer system, against defects in materials and workmanship
for periods ranging from five to ten years. |
| | An
analysis of the warranty accruals for the three months ended March 31,
2008 and 2007 is as follows: |

| (in
thousands) — Balances
at beginning of year | 2008 — $ 4,768 | $ | 5,337 | |
| --- | --- | --- | --- | --- |
| Less:
Payments made during the period | (1,194 | ) | (1,724 | ) |
| Add: Warranty
provision for the period | 1,255 | | 1,243 | |
| Changes
to warranty provision for prior years | (11 | ) | 120 | |
| Balances
at March 31 | $ 4,818 | $ | 4,976 | |

| Repurchase
Obligations |
| --- |
| The
Company is a party to certain agreements with third party lenders that
provide financing to the Company’s network of dealers. The
agreements provide for the return of repossessed boats in “like new”
condition to the Company, in exchange for the Company’s assumption of
specified percentages of the unpaid debt obligation on those boats, up to
certain contractually determined dollar limits. As of March 31,
2008, the maximum contractual obligation and the amounts outstanding under
these agreements, which expire in 2008, totaled approximately $4.0
million. The Company records the estimated fair value of the
guarantee; at March 31, 2008, this amount was
immaterial. |

12

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 8. | BUSINESS
SEGMENT INFORMATION |
| --- | --- |
| | The
Company has only one reportable segment, its powerboat manufacturing
business; therefore, the majority of the disclosures required by SFAS 131
are not relevant to the Company. In addition, the Company’s
results of operations and its financial condition are not significantly
reliant upon any single customer or product model. |
| 9. | INVENTORIES |
| | Inventories
consist of the following: |

| (in
thousands ) | March
31, 2008 | December
31, 2007 |
| --- | --- | --- |
| Raw
materials and supplies | $ 16,495 | $ 14,001 |
| Work
in process | 7,316 | 10,830 |
| Finished
goods | 8,601 | 8,328 |
| Total
inventories | $ 32,412 | $ 33,159 |

13

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 10. |
| --- |
| The
Company determines its periodic income tax expense based upon the current
period income and the annual estimated tax rate for the Company adjusted
for any change to prior year estimates. The estimated tax rate is revised,
if necessary, as of the end of each successive interim period during the
fiscal year to the Company's current annual estimated tax
rate. |
| As
of January 1, 2007, the Company adopted the provisions of FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109” (“FIN 48”), which provides
criteria for the recognition, measurement, presentation and disclosure of
uncertain tax positions. The Company is subject to the
provisions of FIN 48 as of January 1, 2007, and has analyzed filing
positions in federal, state and foreign filing jurisdictions where it is
required to file income tax returns, as well as all open years in those
jurisdictions. As a result of the implementation of FIN 48, the
Company did not recognize a material adjustment in the liability for
unrecognized income tax benefits. As of the adoption date the
Company had gross tax affected unrecognized tax benefits of $659,000, all
of which, if recognized, would affect the Company’s effective tax
rate. As of December 31, 2007 the Company had gross tax
affected unrecognized tax benefits of $175,000, all of which, if
recognized would affect the Company’s effective tax rate. There
have been no material changes to these amounts during the three months
ended March 31, 2008. |
| The
Company and its subsidiaries are subject to U.S. federal and state income
tax in multiple jurisdictions. In many cases our uncertain tax
positions are related to tax years that remain open and subject to
examination by the relevant taxing authorities. The Company’s
2004 through 2007 tax years remain open to examination. |
| It
is reasonably possible that the amount of the unrecognized benefits with
respect to our unrecognized tax positions will increase or decrease in the
next 12 months. These changes may be the result of, among other
things, state tax settlements under Voluntary Disclosure
Agreements. However, quantification of an estimated range
cannot be made at this time. |
| The
Company’s policy is to record interest and penalties related to income tax
matters as income tax expense. Accrued interest and penalties
were immaterial as of March 31, 2008 and March 31,
2007. |

14

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 11. |
| --- |
| The
Company participates in a multiple employer pension plan. The
following represents the net periodic benefit cost and related components
for the plan: |

| (in
thousands) | Three
months ended March
31, — 2008 | | 2007 | |
| --- | --- | --- | --- | --- |
| Service
cost | $ - | | $ - | |
| Interest
cost | 70 | | 64 | |
| Expected
return on plan assets | (109 | ) | (96 | ) |
| Amortization
of net losses | - | | 20 | |
| Net
periodic benefit cost | $ (39 | ) | $ (12 | ) |

The Company does not currently expect to make any contributions to this plan in 2008.

15

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 12. |
| --- |
| The
Company adopted SFAS 157, “Fair Value Measurements,” and FSP 157-2,
“Effective Date of FASB Statement No. 157,” in the first quarter of
2008. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosure requirements about items
measured at fair value. SFAS 157 does not require any new fair
value measurements. It applies to accounting pronouncements
that already require or permit fair value measures. As a
result, the Company will not be required to recognize any new assets or
liabilities at fair value. FSP 157-2 delays the effective date of SFAS 157
for nonfinancial assets and nonfinancial liabilities, except for items
that are recognized or disclosed at fair value in the financial statements
on a recurring basis. |
| SFAS
157 establishes a fair value hierarchy that distinguishes between
assumptions based on market data (observable inputs) and the Company’s
assumptions (unobservable inputs). The hierarchy consists of
three broad levels as follows: |
| Level
1 – Quoted market prices in active markets for identical assets or
liabilities |
| Level
2 – Inputs other than level 1 that are either directly or indirectly
observable |
| Level
3 – Unobservable inputs developed using the Company’s estimates and
assumptions, which reflect those that market participants would
use. |
| Securities: |
| The
Company determines the fair value of the marketable securities that are
trading and available for sale through quoted market
prices. The adoption of SFAS 157 had no effect on the Company’s
valuation of marketable securities. |
| The
following table summarizes the valuation of financial instruments measured
at fair value on a recurring basis in the balance sheet as of March 31,
2008: |

| (in
thousands) | Fair
value Measurements at March 31, 2008 with — Quoted
prices in active
markets for identical
assets | Significant
other observable inputs | Significant unobservable inputs |
| --- | --- | --- | --- |
| | (Level
1) | (Level
2) | (Level
3) |
| Assets: | | | |
| Trading
securities | $ 4,863 | $ - | $ - |
| Available
for sale securities | 48,969 | - | - |

In February 2007, the FASB issued SFAS No. 159, “ The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115 .” This statement permits entities to choose to measure many financial instruments and certain other items at fair value. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, including interim periods within that fiscal year. The Company did not elect the fair value option for any of its existing financial instruments as of March 31, 2008 and the Company has not determined whether or not it will elect this option for financial instruments it may acquire in the future.

16

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

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

OVERVIEW

Marine Products Corporation, through our wholly-owned subsidiaries Chaparral and Robalo, is a leading manufacturer of recreational fiberglass powerboats. Our sales and profits are generated by selling the products that we manufacture to a network of independent dealers who in turn sell the products to retail customers. These dealers are located throughout the continental United States and in several international markets. A majority of these dealers finance their inventory through third-party floorplan lenders, who pay Marine Products generally within seven to 10 days after delivery of the products to the dealers.

The discussion on business and financial strategies of the Company set forth under the heading “Overview” in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007 is incorporated herein by reference. There have been no significant changes in the strategies since year-end.

In implementing these strategies and attempting to optimize our financial returns, management closely monitors dealer orders and inventories, the production mix of its various models, and indications of near term demand such as consumer confidence, interest rates, fuel costs, dealer orders placed at our annual dealer conferences, and retail attendance and orders at annual winter boat show exhibitions. We also consider trends related to certain key financial and other data, including our market share, unit sales of our products, average selling price per unit, and gross profit margins, among others, as indicators of the success of our strategies. Marine Products' financial results are affected by consumer confidence — because pleasure boating is a discretionary expenditure, interest rates — because many retail customers finance the purchase of their boats, and other socioeconomic and environmental factors such as availability of leisure time, consumer preferences, demographics and the weather.

We reduced our production levels during the first quarter of 2008 in response to our concerns about dealer and consumer demand for products in our industry, which resulted from continued problems in the housing market, high fuel prices and concern regarding a general economic slowdown. In the first quarter of 2008, our production levels were lower than the levels during the first quarter of 2007. Gross profit margin as a percentage of net sales declined primarily due to the cost of our new retail incentive program associated with boats already sold to dealers. This retail program for the early spring selling season is designed to reduce current field boat inventory and generate additional boat orders. Sales of the new Chaparral Sunesta Wide Techs and Xtremes continued to be strong during the quarter, and accounted for the increase in the average selling price per boat. Robalo unit sales during the first quarter of 2008 were higher than in the prior year as well. At the end of the quarter, our unit backlog was lower than at this time last year.

17

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

OUTLOOK

The discussion on the outlook for 2008 is incorporated herein by reference from the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007.

The weak dealer and customer demand that began several years ago continued during the first quarter of 2008. High fuel prices and economic uncertainty continue to reduce demand for discretionary purchases such as pleasure boats. The Company also believes that the recent residential mortgage crisis is having a negative impact on our business, due to the wealth effect of lower real estate values. This is of particular concern since the subprime mortgage problems and resulting delinquency rates, foreclosures, and depressed real estate prices are prominent in Southern California and Florida, two of our major markets. For these reasons, we continue to maintain our dealer inventories and production at conservative levels.

The Company is in the midst of its 2008 model year, and we are pleased with the dealer reaction and resulting orders for Chaparral’s redesigned Sunesta Wide Tech TM product line, which increased in unit sales compared to the prior year, and was responsible for the Company’s increase in average selling prices. However, overall unit sales decreased in the first quarter of 2008. The winter boat show season was slow in many of the Company’s markets, which compels us to be pessimistic about the 2008 retail selling season. During the first quarter, we have undertaken cost reduction measures, including some headcount reductions. While these cost reduction efforts served to increase our gross margin profitability, these cost reductions were offset by our new retail program for the spring selling season which caused our gross margin profitability to be lower in the first quarter of 2008 than the first quarter of last year. The Company anticipates that further production cuts and cost reduction efforts may be necessary in 2008, as the Company believes that the weak market for its products will continue.

18

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS

Key operating and financial statistics for the three months ended March 31, 2008 and 2007 follow:

| ($
in thousands) | Three
months ended March
31 | |
| --- | --- | --- |
| | 2008 | 2007 |
| Total
number of boats sold | 1,402 | 1,536 |
| Average
gross selling price per boat | $ 44.7 | $ 41.0 |
| Net
sales | $ 65,542 | $ 64,976 |
| Percentage
of cost of goods sold to net sales | 79.5 % | 78.5 % |
| Gross
profit margin percent | 20.5 % | 21.5 % |
| Percentage
of selling, general and administrative expenses to net
sales | 12.6 % | 13.0 % |
| Operating
income | $ 5,205 | $ 5,521 |
| Warranty
expense | $ 1,244 | $ 1,360 |

19

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

THREE MONTHS ENDED MARCH 31, 2008 COMPARED TO THREE MONTHS ENDED MARCH 31, 2007

Net sales for the three months ended March 31, 2008 increased $0.6 million or 0.9 percent compared to the comparable period in 2007. The change in net sales was comprised of a 9.0 percent increase in average gross selling price per boat, offset by an 8.7 percent decrease in the number of boats sold. Sales of the new Chaparral Sunesta Wide Techs and Xtremes continued to be strong during the quarter, and accounted for the increase in the average selling price per boat. The decrease in net sales in the domestic market was partially offset by strong growth outside of the United States due to the weakness of the U.S. dollar. In the first quarter of 2008, sales outside of the United States accounted for approximately 32.3 percent of net sales compared to approximately 25.3 percent of net sales for the prior year.

Cost of goods sold for the three months ended March 31, 2008 was $52.1 million compared to $51.0 million for the comparable period in 2007, an increase of $1.1 million or 2.1 percent. Cost of goods sold, as a percentage of net sales, increased primarily as the result of the cost of our new retail incentive program associated with boats already sold to dealers, changes in model mix and cost inefficiencies due to lower production volumes.

Selling, general and administrative expenses for the three months ended March 31, 2008 were $8.3 million compared to $8.4 million for the comparable period in 2007, a decrease of $0.1 million or 2.2 percent. The decrease in selling, general and administrative expenses was primarily due to lower incentive compensation expense consistent with lower profitability. Warranty expense was 1.9 percent of net sales for the three months ended March 31, 2008 compared to 2.1 percent in the prior year, primarily due to improved claims experience and our quality initiatives.

Operating income for the three months ended March 31, 2008 decreased $0.3 million or 5.7 percent compared to the comparable period in 2007. Operating income was lower primarily due to lower gross profit margin.

Interest income was $0.6 million during the three months ended March 31, 2008 compared to $0.7 million for the comparable period in 2007. This decrease resulted primarily from lower returns on our short term maturities due to an increase, which began in the third quarter of 2007, in balances invested in municipal bonds, which carry a lower nominal yield.

Income tax provision for the three months ended March 31, 2008 of $1.6 million was $0.7 million or 29.8 percent lower than the income tax provision of $2.3 million for the comparable period in 2007. The income tax provision reflects an effective tax rate of 28.4 percent, compared to 37.3 percent for the comparable period in the prior year. The decrease in the effective rate was due primarily to an increase in tax exempt income as a percentage of income before taxes.

20

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

The Company’s cash and cash equivalents at March 31, 2008 were $8.1 million. The following table sets forth the historical cash flows for:

| ( in
thousands ) | Three
months ended March 31, — 2008 | | 2007 | |
| --- | --- | --- | --- | --- |
| Net
cash provided by operating activities | $ 12,028 | | $ 6,276 | |
| Net
cash used for investing activities | (3,853 | ) | (232 | ) |
| Net
cash used for financing activities | $ (3,278 | ) | $ (4,265 | ) |

Cash provided by operating activities for the three months ended March 31, 2008 increased approximately $5.8 million compared to the comparable period in 2007. This increase is primarily the result of a decrease in working capital requirements in 2008 compared to 2007.

Cash used for investing activities for the three months ended March 31, 2008 increased approximately $3.6 million compared to the comparable period in 2007, resulting from increased purchases of long-term marketable securities.

Cash used for financing activities for the three months ended March 31, 2008 decreased approximately $1.0 million primarily due to a decrease in the cash paid for repurchases of common stock on the open market.

Financial Condition and Liquidity

The Company believes that the liquidity provided by existing cash, cash equivalents and marketable securities, its overall strong capitalization, and cash expected to be generated from operations, will provide sufficient capital to meet the Company’s requirements for the next twelve months. The Company believes that the liquidity will allow it the ability to fund any growth and provide the opportunity to take advantage of business opportunities that may arise.

The Company’s decisions about the amount of cash to be used for investing and financing purposes are influenced by its capital position and the expected amount of cash to be provided by operations.

21

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

Cash Requirements

The Company currently expects that capital expenditures during 2008 will be approximately $1.5 million, of which $0.1 million has been spent through March 31, 2008.

The Company participates in a multiple employer Retirement Income Plan, sponsored by RPC, Inc. (“RPC”). The Company does not currently expect to make any contributions to this plan during 2008.

On April 22, 2008, the Board of Directors approved a quarterly cash dividend per common share of $0.065. The Company expects to continue to pay cash dividends to common stockholders, subject to the earnings and financial condition of the Company and other relevant factors.

The Company has purchased a total of 4,925,157 shares in the open market pursuant to April 2001, September 2005, and January 2008 resolutions of the Board of Directors that authorized in the aggregate the repurchase of up to 8,250,000 shares. As of March 31, 2008, the Company can purchase 3,324,843 additional shares under these programs. Details regarding the shares repurchased during the first quarter of 2008 have been disclosed in Part II, Item 2 of this document.

The Company has an immaterial amount of obligations and commitments that require future payments. See the section below titled “Off Balance Sheet Arrangements” for details regarding agreements that the Company has with third-party dealer floor plan lenders.

The Company warrants the entire boat, excluding the engine, against defects in materials and workmanship for a period of one year. The Company also warrants the entire deck and hull, including its bulkhead and supporting stringer system, against defects in materials and workmanship for periods ranging from five to ten years. See Note 7 to the Consolidated Financial Statements for a detail of activity in the warranty accruals during the three months ended March 31, 2008 and 2007.

OFF BALANCE SHEET ARRANGEMENTS

To assist dealers in obtaining financing for the purchase of its boats for inventory, the Company has entered into agreements with various dealers and selected third-party lenders to guarantee varying amounts of qualifying dealers’ debt obligations. The Company’s obligation under these guarantees becomes effective in the case of default by the dealer. The agreements provide for the return of all repossessed boats in “like new” condition to the Company, in exchange for the Company’s assumption of specified percentages of the dealers’ unpaid debt obligation on those boats capped at the lender level. As of March 31, 2008, the maximum contractual obligation to the lenders and the amount outstanding under these agreements, which expire in 2008, totaled approximately $4.0 million. The Company has recorded the estimated fair value of this guarantee; at March 31, 2008, this amount is immaterial and did not change from the prior year.

22

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

RELATED PARTY TRANSACTIONS

In conjunction with its spin-off from RPC in 2001, the Company and RPC entered into various agreements that define their relationship after the spin-off. A detailed discussion of the various agreements in effect is contained in the Company’s annual report on Form 10-K for the year ended December 31, 2007. RPC charged the Company for its allocable share of administrative costs incurred for services rendered on behalf of Marine Products totaling approximately $263,000 in the three months ended March 31, 2008 and approximately $251,000 in the three months ended March 31, 2007.

CRITICAL ACCOUNTING POLICIES

The discussion of Critical Accounting Policies is incorporated herein by reference from the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007. There have been no significant changes in the critical accounting policies since year-end.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

See Note 3 of the Consolidated Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on results of operations and financial condition.

SEASONALITY

Marine Products’ quarterly operating results are affected by weather and the general economic conditions in the United States. Quarterly operating results for the second quarter historically have reflected the highest quarterly sales volume during the year with the first quarter being the next highest sales quarter. However, the results for any quarter are not necessarily indicative of results to be expected in any future period.

INFLATION

During 2008 and 2007 the Company has experienced an increase in certain material and component costs. The Company has responded to these increases in costs by instituting price increases to its dealers for the 2008 model year which began on July 1, 2007. These price increases did not fully absorb the increased material costs during 2008 and 2007 and therefore negatively impacted the Company’s gross margin. With the continued risk of high commodity prices, energy prices and petroleum based products, the price of materials may continue to increase. If the prices of these raw materials and components continue to increase, or the prices of other factors of production increase, Marine Products will, to the extent deemed appropriate, attempt to increase its product prices to offset its increased costs. No assurance can be given, however, that the Company will be able to adequately increase its product prices in response to inflation or estimate the impact on future sales of increasing our product prices.

23

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

New boat buyers typically finance their purchases. Higher inflation typically results in higher interest rates that could translate into an increased cost of boat ownership. Prospective buyers may choose to delay their purchases or buy a less expensive boat in the event that interest rates rise.

FORWARD-LOOKING STATEMENTS

Certain statements made in this report that are not historical facts are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, the expected effect of recent accounting pronouncements on the Company’s consolidated financial statements; the Company’s expectation that it will not make any contributions to its pension plan in 2008; the Company’s pessimism about the 2008 retail selling season; the Company’s anticipation that further production cuts and cost reduction efforts may be necessary in 2008; the Company’s belief that the weak market for its products will continue; the Company’s belief that its liquidity, capitalization and cash expected to be generated from operations will provide sufficient capital to meet the Company’s requirements for the next 12 months; the Company’s expectations about capital expenditures during 2008; the Company’s expectations about dividends; the Company’s expectations regarding market risk of its investment portfolio; and the Company’s expectation about the effect of litigation on the Company’s financial position or results of operations. The words “may,” “should,” “will,” “expect,” “believe,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this document that do not relate to historical facts are intended to identify forward-looking statements. Such statements are based on certain assumptions and analyses made by our management in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate. We caution you that such statements are only predictions and not guarantees of future performance and that actual results, developments and business decisions may differ from those envisioned by the forward-looking statements. Risk factors that could cause such future events not to occur as expected include the following: 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 financial results against increasing commodity prices, the impact of rising gasoline prices and a weak housing market on consumer demand for our products, competition from other boat manufacturers and dealers, and insurance companies that insure a number of Marine Products’ marketable securities have recently been downgraded, which may cause volatility in the market price of Marine Products’ marketable securities. 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, filed with the Securities and Exchange Commission for the year ended December 31, 2007. The Company does not undertake to update its forward-looking statements.

24

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Marine Products does not utilize financial instruments for trading purposes and, as of March 31, 2008, did not hold derivative financial instruments that could expose the Company to significant market risk. Also, as of March 31, 2008, the Company’s investment portfolio, totaling approximately $49.0 million and comprised primarily of municipal debt securities, is subject to interest rate risk exposure. This risk is managed through conservative policies to invest in high-quality obligations that are both short-term and long-term in nature, with a recent increased emphasis on long-term securities. Because Marine Products’ investment portfolio mix has been allocated towards securities with similar term maturities compared to the end of fiscal year 2007, the risk of material market value fluctuations is not expected to be significantly different from the end of fiscal year 2007 and the Company currently expects no such changes through the remainder of the current year.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures - The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to its management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, March 31, 2008 (the “Evaluation Date”), the Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the Evaluation Date.

Changes in internal control over financial reporting - Management’s evaluation of changes in internal control did not identify any changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

25

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Marine Products is involved in litigation from time to time in the ordinary course of its business. Marine Products does not believe that the outcome of such litigation will have a material adverse effect on the financial position or results of operations of Marine Products.

Item 1A. RISK FACTORS

See the risk factors described in the Company’s annual report on Form 10-K for the year ended December 31, 2007.

26

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Shares repurchased by Marine Products during the three months ended March 31, 2008 were as follows:

| Period — Month

1 January

1, 2008 to January
31, 2008 | 250,019 | (2 | ) | Average
Price Paid
Per Share (or Unit) — $ 8.19 | - | 3,401,343 |
| --- | --- | --- | --- | --- | --- | --- |
| Month

2 February

1, 2008 to February
29, 2008 | 162,457 | (3 | ) | $ 8.61 | 46,800 | 3,354,543 |
| Month

3 March

1, 2008 to March
31, 2008 | 30,982 | (4 | ) | $ 7.52 | 29,700 | 3,324,843 |
| Totals | 443,458 | | | $ 8.30 | 76,500 | 3,324,843 |

| (1) | The
Company’s Board of Directors announced a stock buyback program on April
25, 2001 authorizing the repurchase of 2,250,000 shares in the open market
and another on September 14, 2005 authorizing the repurchase of an
additional 3,000,000 shares. On January 22, 2008 the Board of
Directors authorized an additional 3,000,000 shares that the Company can
repurchase. A total of 4,925,157 shares have been repurchased
through March 31, 2008. The programs do not have predetermined
expiration dates. |
| --- | --- |
| (2) | Includes
220,351 shares tendered in connection with option exercises and 29,668
shares repurchased for taxes related to vesting of restricted
shares. |
| (3) | Includes
115,657 shares tendered in connection with option
exercises. |
| (4) | Includes
1,282 shares tendered in connection with option
exercises. |

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

27

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

| ITEM
6. | |
| --- | --- |
| Exhibit
Number | Description |
| 3.1(a) | Marine
Products Corporation Articles of Incorporation (incorporated herein by
reference to Exhibit 3.1 to the Registrant’s Registration Statement on
Form 10 filed on February 13, 2001). |
| 3.1
(b) | Certificate
of Amendment of Certificate of Incorporation of Marine Products
Corporation executed on June 8, 2005 (incorporated herein by reference to
Exhibit 99.1 to the Registrant's Current Report on Form 8-K filed June 9,
2005). |
| 3.2 | Amended
and Restated By-laws of Marine Products Corporation (incorporated herein
by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
filed on October 25, 2007). |
| 4 | Restated
Form of Stock Certificate (incorporated herein by reference to Exhibit 4.1
to the Registrant’s Registration Statement on Form 10 filed on February
13, 2001). |
| 31.1 | Section
302 certification for Chief Executive Officer |
| 31.2 | Section
302 certification for Chief Financial Officer |
| 32.1 | Section
906 certifications for Chief Executive Officer and Chief Financial
Officer |

28

MARINE PRODUCTS CORPORATION AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| | MARINE
PRODUCTS CORPORATION |
| --- | --- |
| | /s/ Richard
A. Hubbell |
| Date:
May 1, 2008 | Richard
A. Hubbell |
| | President
and Chief Executive Officer |
| | (Principal
Executive Officer) |
| | /s/ Ben
M. Palmer |
| Date:
May 1, 2008 | Ben
M. Palmer |
| | Vice
President, Chief Financial Officer and Treasurer |
| | (Principal
Financial and Accounting Officer) |

29