J. Michael Pearson - President and Chief Executive Officer Mark Stauffer - Executive Vice President and Chief Financial Officer Cabell Acree - Vice President and General Counsel Christopher DeAlmeida - Investor Relations

Fred Buonocore - CJS Securities David Yuschak - SMH Capital Jack Kasprzak - BB&T Capital Markets Trey Grooms - Stephens, Inc. Jay Brosnahan - WestPark Capital Inc. Min Cho - FBR Capital Markets Ross Berner - Weintraub Capital

Good day everyone and welcome to the Orion Marine Group third quarter 2008 earnings conference call. Today’s call is being recorded. For opening remarks and introductions, I would like to turn the call over to Mr. Chris DeAlmeida. Please go ahead sir.

Good morning and welcome to the Orion Marine Group third quarter 2008 earnings conference call. Joining me today are Mike Pearson, Orion Marine Group’s President and Chief Executive Officer; Mark Stauffer, our Executive Vice President and Chief Financial Officer; and Cabell Acree, our Vice President and General Counsel. Regarding the format of the call, we have allocated about 15 minutes for prepared remarks in which Mike and Mark will highlight our recall through third quarter and I will look for the remainder of 2008 as well 2009, and then we will open up the call to questions for the remainder of the time. During the course of this conference call we may make projections and other forward-looking statements regarding, among other things, our end markets, revenues, gross profits, gross margin, EBITDA, backlog, projects and negotiation of pending awards, as well as our estimates and assumptions regarding our future growth, EBITDA, gross margin, administrative expenses and capital expenditures. These statements or predictions are subject to risks and uncertainties that may cause actual results to differ materially. Moreover, past performance is not necessarily an indicator of future results. By providing this information we undertake no obligation to update or revise any projections of forward-looking statements whether as the result of new developments or otherwise. Also, please not that EBITDA and EBITDA margin may be deemed non-GAAP financial measures under the rules of the Securities Exchange Commission, including Regulation G. Please refer to the reconciliation accompanying this earnings call available on our website at www.orionmarinegroup.com for comments on the use of non-GAAP financial measures, as well as applicable reconciliations to the most comparable GAAP measures. Also, please refer to our earnings release issued this morning, November 6, 2008 which is available on our website for additional discussions of risk factors that could cause actual results to differ materially from our current expectations. Before I turn the call over to Mike, I would like to point out that this morning’s earnings release highlighted our current market outlook as well as details of our revenue growth goal and EBITDA goal for the fourth quarter full year 2008 and initial goals for the full year 2009 as well as other helpful information. Based on our experiences and feedback from the investment community over the past year, we felt it was prudent to provide additional clarity and visibility to our full year goals and help investors better understand quarterly fluctuations. However, this additional visibility does not deter from our previously stated long term goals and our recommendations to view the Company over the long term. As a matter of housekeeping, we plan on issuing new information for the next quarter during our year-end earnings release and follow the same pattern on a go-forward basis. Should you have any questions on that, please feel free to give me a call. With that, I will turn the call over to Mike Pearson, President and Chief Executive Officer. Mike? J. Michael Pearson: Thank you, Chris. Good morning and thanks for joining us. Overall, we are pleased with our results for the third quarter particularly in light of the active storm season. As you know, during the quarter, we felt the effects of a rather active hurricane season. I would like to thank all of our employees for doing an excellent job at executing our hurricane preparedness program, securing their job flights, and returning to work as soon as possible. As a result, we were ready to quickly respond to our customers’ needs. We encountered a total of seven main storms, which impacted our operations and resulted in our having to shut down all of our projects at least once, with some projects being shut down three times, which is historically abnormal. While projects are shutdown, we are unable to recognize revenue under percentage of completion account. Therefore, revenues that we would have otherwise recognized during the quarter were shifted in the future periods. Specifically, approximately $6 million of revenue during the third quarter was shifted into future periods. However, I would want to remind you that this is not loss revenue. It is just revenue that is delayed and should be recognized in future periods. Now, while these storms reduced to recognize revenue during the quarter, we expect to see new bid opportunities as a result of this active hurricane season. And in fact, we are already working with several customers on small emergency repair projects. Additionally, the president recently signed into law supplemental emergency funding legislation with $740 million being set aside for the Corps of Engineers for emergency dredging and construction projects in the storm affected areas. On the cost side, we built in contingencies to cover estimated demobilization and remobilization costs associated with shutting projects down for pending storms. For the third quarter, we adequately covered these costs. Aside from the storms, we were pleased with our results for the quarter, which were in line with our overall expectations. Now, turning to the market with future outlook, there is no doubt we are experiencing an extraordinary time in the history of our economy. The uncertain economic outlook is affecting numerous industries and companies. However, today, we are encouraged that we have not seen a significant drop in our end-market activity. We anticipate that the impacts of the economic downturn may be mitigated by the need to rehabilitate America’s crumbling infrastructure and to provide needed improvements. Based upon public reports, we expect these improvements to be forthcoming in the future as it remains a continued purpose on infrastructure in Congress, and as such, projects could serve as a potential stimulus for reviving the economy. In particular, the recent election results further highlight this focus as President-Elect Obama’s proposals includes spending $150 billion on infrastructure improvements over a ten year period and spending an additional $60 billion over the same period for bridge repairs and reconstruction, and also remaining focused on continuing to build hurricane defenses and restoring Southeast Louisiana’s wetlands. Further, despite some decrease in global shipping traffic, we believe Gulf Coast and Southeast Atlantic ports will continue with the expansion plans. First, decreases and shipping fees may put pressure on shippers to become more efficient with larger ships. Secondly, financing for the widening of the Panama Canal is now in place, and Gulf of Mexico and Southeast Atlantic ports should continue plans for increases in both tonnage and shipping traffic. For example, the Port of Houston has continued to see an increase in both tonnage and ship traffic year-over-year and currently has plans to continue substantial expansion of the port over the next 15 years. Also, today we announced the award of a large dredging project associated with continued port expansion in the Houston and Galveston areas. Similarly, the other ports in the Gulf of Mexico continue to add break-bulk capacity to accommodate increased heavy lift and private cargo ships as these ports have sufficient land available for future expansion. Additionally, we continue to see opportunities in the cruise industry. Despite a recently reported drop in cruise bookings, there remain several large ships under construction or being delivered that are expected to come online over the next couple of years and we believe, we will see either mooring upgrades to existing facilities or new cruise ship pier construction opportunities as a result. To date, we are still seeing bid opportunities and projects related to bridge construction and repair in our markets, and we continue to work on several bridges in Florida that are over water. Also, we remain encouraged that the Water Resources and Development Act, or WRDA, that was passed last year, will start to provide opportunities in the second half of 2009. For example, we expect to bid on recently issued tender packages for New Orleans’ hurricane protection and coastal restoration programs. And finally, the Department of Defense continues to see funding increases for BRAC, the Base Realignment and Closures Program, and their funding is projected to be increased 19% next year after the 29% increase in 2008, and we believe a portion of that may be marine related. Overall, we continue to see a reasonable strength in our end markets and good prospects both near term and long term. However, we will remain vigilant of the uncertainty in the economic environment. As we previously have stated depending on the breadth and depth of any downturn, we could see negative impacts on our business. It is not unreasonable to think that some of our end markets could see some deterioration or bidding delays as a result of the credit crisis. However, other end markets could reasonably see increased bid in opportunities and outperform due to increased spending on infrastructure projects, as well as hurricane protection and restoration projects. Currently, we are seeing good overall bid opportunities for 2009 and we are cautiously optimistic about the year ahead. As we look at 2009, we had an estimated $96.6 million of backlog at the end of the third quarter, booked and ready to be liquidated during 2009. As we announced today, we were awarded a large port channel deepening project near Galveston, Texas, which added approximately $13 million more to 2009 backlog. Including this project, we have about $110 million worth of backlog that is expected to be liquidated in 2009. On top of that, we were tracking almost $1.4 billion of potential bid opportunities for 2009, which excludes the recent Federal Supplemental Emergency Storm Funding. As a result of our backlog in current bid opportunities, our initial goal is to grow full year 2009 revenue between 12% and 16% as compared the full year 2008. Additionally, we have set our initial full year 2009 EBITDA margin goal to be 14% to 18%. I would like to point out that achievement of these goals could be impacted by the uncertainty of economic outlook, and as a reminder, we cannot guarantee that the revenue projected in our backlog will be realized or if realized will result in earnings. In closing, there is no doubt 2008 has been a challenging year. However, as we look at 2009, we are cautiously optimistic about the prospects that lie ahead. Our main goal is to continue to grow the business profitably, so we will be prudent in our bidding and execution and vigilant in monitoring economic developments, which are currently difficult to predict with regard to any positive or negative impacts on our business. With that, I will turn the call over to Mark Stauffer to discuss our financial results in more detail. Mark?

Thanks Mike and thanks again for joining us. Net income for the third quarter 2008 was $3.8 million or $0.17 per diluted share. This net income includes approximately $600,000 due to reconciling federal and state deferred taxes and the benefit of the domestic production deduction. Excluding the tax reconciliation, net income would have been $3.2 million or $0.15 per diluted share, which compares with $5.8 million or $0.26 per diluted share in the prior year period. Third quarter contract revenues increased 4.8% year-over-year to $62.9 million of which 49% were generated from federal, state and local government agencies and 51% from private industry. This compares to 52% from federal, state and local government agencies and 48% from private industry for the third quarter of 2007. EBITDA margin for the quarter was 16.5% or in line with our expectations. I would like to remind investors that there can be fluctuations in quarter-to-quarter results due to the timing and mix of projects. For this reason, we suggest investors focus on the long term and annual results rather than quarter-to-quarter fluctuations. However, it is also partially for this reason that we have decided not only to give full year revenue growth goal and EBITDA margin goal, but also to provide these goals for the upcoming quarter. We hope this will help the investment community better understand quarterly fluctuations in our business. We expect fourth quarter 2008 revenue to grow 19% to 26% year-over-year, and we have a fourth quarter 2008 EBITDA margin goal of 15% to 18%. Due to current project schedules, the Company will not fully realize the revenue that shifted out of the third quarter during about 2008. Additionally, the bidding and award of some contracts were delayed as a result of the storms specifically Hurricane Ike, which reduces the amount of revenue opportunity in 2008. Therefore, our full year 2008 revenue growth goal will be below our previously stated goal of 28% to 32% year-over-year and we will now be in the range of 21% to 23% year-over-year. However, we remain comfortable with our previously announced full year 2008 EBITDA margin goal range of 14% to 16%. As Mike mentioned earlier, for 2009, we expect revenue to grow 12% to 16% as compared to 2008. Our full year 2009 EBITDA margin goal is 14% to 18%. Given the uncertainty in the economic environment, we believe that it is important to have a strong stable balance sheet. We had maintained the strong balance sheet with good free cash flow generation, low leverage, and a solid cash position for many years. Despite the uncertain economic environment, our approach in solid balance sheet remained intact. During the quarter, net cash flow from operating activities was $16.4 million which is an increase of $10 million year-over-year. We believe a good positive cash flow from operation is one of the foundations of our Company that is viewed favorably by our bonding company and is a safeguard during volatile times like these. As a result of continued free cash flow from operations, at this time, we do not anticipate the need to utilize our revolving line of credit. Additionally, we once again ended the quarter with a solid cash position. As of September 30, 2008, we had cash on hand and availability under our revolving line of credit of approximately $26.7 million. In addition, we had another $15 million of liquidity available to the Company at the discretion of our lenders. Finally, our debt position remains low. As of the end of the quarter, our leverage was less than one time to EBITDA, which we believe is very conservative and well below our comfort level of 2.5 to 3 times EBITDA. To sum it up, we maintained our solid financial position during the quarter. Our strong balance sheet should help us in the current economic crisis. As Mike mentioned with our current backlog and our visibilities for good market opportunities, we are comfortable with our financial position as we head into the upcoming year. With that I will turn the call back over to Chris to begin the Q&A portion of the call.

Thank you, Mark and Mike. We would now like to open up the call to questions. Connie, will you please review the procedure for placing a question?

(Operator Instructions) Your first question comes from the line of Fred Buonocore – CJS Securities. Fred Buonocore – CJS Securities: Good morning gentlemen. Nice quarter and all things considered with the hurricanes and what not. One thing I want to ask about is just to see if I am looking at this correctly, if you ex the hurricanes looks like your revenue would have been around $69 million for the quarter, which would have been up around 15% year-over-year and then kind of given year, Q4 guidance that you are giving now looks like without the hurricanes you might have been a little bit short of your initial 28% to 32% top line growth. Is that, just to be clear if this is reflective of the impact of the hurricanes also on Q4 and pushing projects out or was there some other headwind or pressure that arose in the quarter that also impacted revenue growth?

No. I think Fred you have got it spot on there. As we talked about during the prepared remarks, as a result of the storm, that the bidding projects, the bidding environment got shifted out as well, as an example, the project we announced this morning for the Galveston dredging projects, we were apparent low bidder on that project two months ago and we are just seeing the award today. So, there was a lot of disruption particularly in the Upper Texas Gulf region and Louisiana region with people just getting back not only up to speed but assessing their own individual needs and things of that nature, and it had an impact in shifting opportunities rightward. Fred Buonocore – CJS Securities: I got it. So, we could really look at the active hurricane season not just had an impact on Q3, it was really a whole second half impact? J. Michael Pearson: Well, the other thing, Fred, to keep in mind is that when our customers shut down, they shut down the bidding activity. So, there is a bit of delay in that not only on the jobs that we were awaiting award on that already had been bid, but it slows down either issuing tender packages or evaluating bids in progress. Fred Buonocore – CJS Securities: I got it. That makes sense. And then, secondly in the press release and in the prepared remarks, Mike, you talked about that there were certain kinds of projects that might be impacted by the deteriorating economic environment while there would be others that could potentially offset that or represent upside. You analyzed that pretty well in your remarks, but could you just give a little bit more specificity of an example of type of end-market project that we might see slowdown in versus type of project that we might see a pick up in? J. Michael Pearson: Alright, well, I recently attended a McGraw-Hill construction conference in Washington, DC few weeks ago. That was very helpful that to try to understand what is happening to the EMC sector and from that, I was able to learn that the markets that are deteriorating, that are dragging EMC down as a sector is a housing construction, companies that build commercial stores of warehouses, hotels, office buildings, things like that, markets that we do not participate in, but nevertheless, it has downward pressure on us as well. And the markets that projected to hold or grow are highway and bridges, infrastructure. There is a large infrastructure built that is currently being kicked around with the House Transportation and Infrastructure Committee for stimulus package, and we think right after Congress returns mid-November, this will get on the floor and start getting tabled for passage certainly if not with the incumbent president, with the new president elect. And we have seen figures bantered around of a $500 billion stimulus bill. So, we are excited about that and the feeling is it is safe for the next five years, 2010 to 2015 is going to be the big boost with this new administration. Fred Buonocore – CJS Securities: I got it. And then finally, if you have much exposure or do you do much business in the oil and gas industry? I know you did some, just wondering to what magnitude. J. Michael Pearson: Well, we are more downstream maintenance, existing facilities. We are not affected by, for example, the drill rig activity goes down in the Gulf of Mexico. That does not really mean anything to us because we are building and servicing and maintaining existing infrastructures that is on the shallow waterways. And we are still doing terminal work, as long as this country imports 60% to 70% its oil. There is going to be terminal facilities to be upgraded and maintained, so that is our bread and butter, and I think a lot of the downturn with drilling activity in the Gulf of Mexico is just going to shift EMC companies internationally that participate in those markets. Fred Buonocore – CJS Securities: Excellent. Okay, thank you very much. That is all I have.

Your next question comes from the line of David Yuschak – SMH Capital. David Yuschak – SMH Capital: Good morning gentlemen. As far as your guidance for the fourth quarter, it is relatively wide considering we are almost halfway through November. What kind of conditions both at the top end and the bottom end of that, would you need to give such a wide range, kind of midpoint of the final quarter? J. Michael Pearson: Well, it is really the same answer that we gave I think in 2008, even though we are at this point of the quarter, there is still the impact of when projects might get started, when they get bid, and delayed between bid and award. That is kind of a moving area, and it is a function of the full year. So, as we are going through the quarter I mean this is going to solidify obviously, as we see projects like the one we awarded today get awarded and we can get active in mobilizing to that project. But, as we talked about, it is still moving around a little bit in terms of what actually going to get bid and what we can burn off in the quarter. David Yuschak – SMH Capital: Okay. Now, and just kind of curious, too that [Shaw’s 24.15] in the middle of that major, starting ramp up that project for the New Orleans area that [$700] million contract. Are you guys starting to see anything coming from them as far as any bid requests at all? J. Michael Pearson: Yes. They have got started coming out with tender packages that we will participate in and it is in the early stages at this point. But they do have work planned to be executed starting next year. David Yuschak – SMH Capital: Okay. Is that going to be the first half of next year, do you think? J. Michael Pearson: Probably so, we will see how it comes out, but I would certainly feel like mid-year, it is going to be pretty active over there. David Yuschak – SMH Capital: And then, as far as your outlook for the backlog and the bidding activity, are you more inclined to think, could you have been make some good progress on commercial versus government work as far as the mix. Do you see that maybe heading back towards the other way for the time being at least for 2009? J. Michael Pearson: Well, it could. If the Corps gets organized with allocating the funding that has been diverted their way, we could have a shift that way. There has been a lot of damage as a result of these hurricanes. Hurricane Ike in particular was devastating and I think the Corps is trying to prioritize the needs, and we were very actively bidding Corps work, dredging projects, in particular in the third quarter. It is going to slow down now and we expect that there will be another flurry of bids coming out. I do know that the Harper Dredge market has been very active with bidding, and that is a good sign that the Corps has additional funds that they are going to move forward next year. So, that could be one of the shift areas. We will just have to wait and see. David Yuschak – SMH Capital: And as far as the liquidity on the balance sheet, could you get $80 million cash mentioned earlier and that you have got another of it, $10 million or so potential added. Given the kind of cash generation you could produce next year, is this being more just kind of cautious on maintaining the liquidity on the balance sheet right now relative to your debt servicing that you just want to maybe maintain your relationships with banking right now rather than maybe lower that exposure?

Well, I think it is a little bit of both. I think just historically if you look at us, we have kind of maintained a fairly conservative balance sheet. I think as we move forward, as we talked about certainly, I think the times warrant us being a little prudent as we move forward into ’09. David Yuschak – SMH Capital: And then just real quick on some housekeeping, D&A for 2009, getting kind of maybe rough estimates of what that might be, and in the quarter, you had a pretty good step up in the SG&A expenses, I am just wondering if some of that might be just related to extra costs of Hurricane Ike relative to the D&A and the cost of being public?

I think that the ramp up in the D&A is really related to the amortization as a result of the SSI acquisition, and I think you saw that impact on Q3. That is why it is up substantially year-over-year. A lot of that related to the amortization of the SSI acquisition, some of it is also a full complement of the public company expenses. David Yuschak – SMH Capital: Sequentially, it is quite a bit, I am just wondering you had that cost of amortization in the second quarter as well.

In Q2, we had some improvements in our medical expense basically, it broke in our favor. We do not anticipate, that is a tough one to predict how is that going to go but that was a big factor in why Q2 was down a little. We think Q3 is more in line with what our expectations are over the next several quarters, until that amortization from the SSI rolls off next year. David Yuschak – SMH Capital: Now, when did that roll off, mid-year?

Just after mid-year. David Yuschak – SMH Capital: Okay. So, your D&A for the year ought to be down next year relative to this year? Some…?

Some. That rolls off in about August of next year. David Yuschak – SMH Capital: Okay. That is all I have got for now. Thanks.

Your next question comes from the line of Jack Kasprzak – BB&T Capital Markets. Jack Kasprzak – BB&T Capital Markets: Thanks, good morning. I was wondering if you could frame out with regard to the $1.4 billion bidding opportunities you are tracking for ’09. Is there any point of reference you can give us for what that was 6 or 12 months ago? J. Michael Pearson: Our database of information at this time a year ago was just under a billion, and it is now $1.4. Jack Kasprzak – BB&T Capital Markets: As you said, Mike, that number excludes recent Federal Emergency storm funding so, what is driving the increases if you could give some color there? J. Michael Pearson: Well, it is kind of spread across the board in our end markets, we have got about 11 different end markets but a lot of dock construction and ports, due to the port expansion, … and that has been a big driver and that continues. And the reason we did not try to break down the $740 million is that we really have not got the details on it just yet. I think the Office of Management and Budget is in the process of distributing that, and once we get the details, we will convey it, but we just wanted to exclude it right now. But, essentially, bridgework, cruise pier work, and dock construction are probably the big three. Jack Kasprzak – BB&T Capital Markets: So, does that… and you mentioned too in you commentary that you think the WRDA related funding could start to provide opportunities in second half of 2009. So, that would be incremental to what you just discussed as well. J. Michael Pearson: Yes, we still have not seen WRDA come out on a big way. One of the questions asked a while ago was about the Shaw Group’s project that they are going to be executing. That is just now coming on the table with tender documents. So, hopefully down and the end of the year, we will get some better visibility on how that work is going to be executed. They get the $700 million Corps project in New Orleans for the hurricane protection barriers and that is the kind of work we like to do. So, does that fairly answer you question? Jack Kasprzak – BB&T Capital Markets: Then, the stimulus package, the $150 billion stimulus package that Congress is kicking around, you mentioned that as well. Apparently, there is $1 billion within that for dredging projects. Have you guys seen that? J. Michael Pearson: I have not seen it, but I have been informed of that. I belong to the Dredging Contractors of America, and they're informing the members that that is the case. That there is about $1 billion that is set aside for dredging, and I believe for more marine infrastructure as well, but primarily dredging. That is very important for us to see that come forward. Because think that Corps is going to have a pretty good funding bites for about a three year period. But, I do not really have the details to tell you precisely. But I concur that I have heard that same figure. Jack Kasprzak – BB&T Capital Markets: We start with a $1.4 billion of building opportunities that you are looking at, that you are tracking for 2009. That is up from just under $1 billion or so this time last year. So incremental to that, and we do not know an specific numbers in terms of what it could mean for you guys or opportunity. But, incremental to that would be emergency storm funding, WRDA related projects and anything that could come out of the stimulus package? J. Michael Pearson: What we want you to keep in mind is like WRDA is going to be spread over 10 years. And some of these other funding stimulus is not going to be a one year deal. They will be spread over five to 10 years. It will take us a little time sort that out in the months ahead. But, ignoring all that, our own database of traditional work out there has got a significant step-up from 2008 to 2009, and we see another $2 billion behind 2009 with what we are tracking now. So, we feel pretty good that the work is stacking up. But you cannot ignore the fact that there could be some delays due to the credit crunch and someone decides to delay a project. We have not seen that yet, but it could happen. Jack Kasprzak – BB&T Capital Markets: I am just trying to get, first of all, make sure I understood. I do not want to double count, first of all and secondly, we want to understand the visibility in longer terms. So that helps. J. Michael Pearson: It is as simple as this. It does not get into you database until we know it is real.

Jack, I think you have got. What will happen is as we get clarity on the emergency dredging, we get clarity on the stimulus bill, then portions of those dollars will be added on the to that $1.5 billion. Jack Kasprzak – BB&T Capital Markets: And Mark, the EBITDA margin on the third quarter was 16.5% I think. That was best EBITDA margins so far this year, is that just, even with the storm disruptions, it was better than Q1 and Q2. That is simply because those problem projects have rolled off?

Yes. We think that we have got those problems behind us, as we talked about on the last calls, at the end of Q2 and we are inline with our expectations for Q3.

Your next question comes from Trey Grooms - Stephens, Inc. Trey Grooms - Stephens, Inc.: Just one question on the guidance for 2009, if I could, you guys reiterated in your prepared comments the long term goals of 15% top line and 18% at EBITDA margin and this falls at the top end of the 2009 guidance range. Can you give us some color on what you are expecting that could cause the 2009 to come in lower than that range and your thoughts behind putting the range that you gave with the longer term goals at the higher end of it?

Well I think that, as we have been talking about the end of prepared remarks from some of the questions. I think, given the economic environment, we are cautiously optimistic for next year. But, yes we certainly are, it is not out of the realm of possibility that we could see some impacts because of the economic down turn. So I think that, we are cautiously optimistic about next year. We think our goals for next year are realistic and we think it pruned to put forth the goals we did given the environment that we are in. Trey Grooms - Stephens, Inc.: And with the top line that you… the range that you gave there, any additional green field in that number at that plant?

Yes, we will continue to execute our growth strategy again and we certainly can do increase our programs in the Eastern part of Louisiana and we are taking steps there to be a player in the Southeast Louisiana region. Trey Grooms - Stephens, Inc.: With the pull back in diesel and steel costs that we have seen recently, could you give us some color on what kind of impact that that could have on the cost side of your business? J. Michael Pearson: Well material prices are beginning to abate now on certain commodities. I think iron and steel products have gone down significantly here in the last few months. Cement is pretty flat. Scrap material’s gone down, as well as the steel price. So, diesel fuel is down. I do not know if the price for gasoline and diesel fuel is going to straight out on long term with us being in an importing situation. But, right now, it is very low. I think the commodities going down can be helpful, because some project that may not have gone forward otherwise could be helped out by lowering of these costs because that can be significant on a construction job. Trey Grooms - Stephens, Inc.: Looking at the guidance that you did give for 2009, are you guys thinking that – these cost stay back where they are now or bump up next year. What was your thinking that you baked into that? J. Michael Pearson: Well, we tried to assess any uptake that could occur with out vendors and suppliers. We stay in close contact with them and because of the short duration of most of our contracts, we are able to not give in a bin on commodities and have been successful in passing that on. But, we will keep our eye on it. Like I say, I cannot help but think that fuel prices will rise again. It is just a question of when. But, we are not having any issues with commodity overruns. Trey Grooms - Stephens, Inc.: Mark, this, -- if you did address this, I apologize, but you CapEx expectations for 2009?

We have not announced that yet. We will announce that on the next call. For this year, we have said sort of the $14 million to $16 million with the addition of [40:06]. We have not announced but we will do so on the next call. Trey Grooms - Stephens, Inc.: And then, you talked quite a bit about the infrastructure opportunities that could come in 2009, especially with the changes we are going to have in the presidency, other than kind of base realignment in enclosure there on the navy side, is there any other opportunities that you could see coming for you guys with any type of winding down in the Iraq War if it were to occur this year? J. Michael Pearson: There could be an increase in the navy work. We have a bit this year. We have not seen any major projects come out in the last couple of months. But there still are some navy dock work that will be cleared out and suspect that there is a major shift, down-manning quickly in Iraq. But there could be some short term opportunities. But we do not have any specifics at this time. I think we are all waiting to see what the new president-elect is going to do.

Yes. I think just a couple other general comments. Just generally speaking, to the extent there was a free-up of budgetary funds as a result of your scenario. I think, certainly, that that would be helpful in, say, the Corps funding or other areas, DOT funding. Again, it is kind of a hypothetical question, but I think, hypothetically, that if you saw a reduction of funding over there that would be spent domestically.

Your next question comes from Jay Brosnahan - WestPark Capital Inc. Jay Brosnahan - WestPark Capital Inc.: Most of my question has been answered, but I had a quick question on the gross margins. Was there anything positive or additive to the gross margins due to the hurricanes of this last quarter? J. Michael Pearson: You need to keep it in mind about the duration or the timing of the storms. We generally do not see a whole lot of – there is not a material impact I the right around the storm. We would expect that we would see impacts or opportunities from the storm in future periods. Jay Brosnahan - WestPark Capital Inc.: Right, but with the gross margins, there are not any – would not that have impacted your margins negatively. I guess, what I am trying to get at is as we go forward, should that start to be the baseline for you gross margin?

Well I think as we kind of talked about with respect to EBITDA margin, I think we were more pleased obviously in Q3 versus the first half of the year with -- when we had problems with the two dredging projects that is kind of depressing effect on gross margins and EBITDA margins. So I think we were pleased with the results. I think they were in align of our expectations, both at the gross margin level and at the EBITDA level. I think, as Mike said in his prepared remarks, with respect to storms, on the cost side, we plan in contingencies for the actual event in other words, the actual [demobe] and [remobe] associated with the event. What happens further though, is that we were obviously -- if we're not being productive because we've [demobed] off to the side, we're not recognizing revenue and profit under the percentage-of-completion method accounting. So with respect to the actual impact of the storms, I mean we generally think we have covered our cost associated with this [mobe/demobe] relation to the storms in Q3.

Your next question comes from Min Cho - FBR Capital Markets. Min Cho - FBR Capital Markets: Quick housekeeping question first. Can you break out your percentage of revenue by federal, state, and local?

Yes, our -- just give me one second -- our federal was 11% for the quarter, 16% with states, 22% local. Min Cho - FBR Capital Markets: And can you remind us what that was in the third quarter of 2007, do you have that?

Yes, federal was 12%, so that's essentially the same. State was 7%, so that was an increase in Q3 2008, and the local was 33% a year ago. Min Cho - FBR Capital Markets: And then in terms of just acquisition, I know you are always kind of looking out for opportunistic way. Can you talk about the pipeline right now and also if evaluation has become more realistic given the recent economic downturn?

Well, we continue to look for opportunities and are active in that M&A environment. I think right now we are in a mode of we would like to get some clarity on the economy next year and see if this is going to settle down. It is really not a good time to be going to increase your debt in this kind of environment. So, we were just kind of being cautious, wait and see how the year is going to shape up. We can continue to grow the Company organically next year without any acquisition. So, there is no pressure there. We just want to be prudent that if we do an M&A activity that we are not paying a high price to do it. Min Cho - FBR Capital Markets: Ok, but that makes sense. Also in terms of your dredging business, can you talk a little bit about the competitive landscape right now, sound like there is obviously, a lot more opportunity. Are you seeing any pricing pressure that actually helping price in going forward?

Well, we have seen pricing all over the map. We have seen some irrational pricing, and we have seen some reasonable pricing. I think some of the larger dredging companies are beginning to get booked up. Their utilization is stretching out. I know some of the Hopper Dredge companies are getting booked up very nicely, it looks like next year and I think that will eventually trickle down to the smaller companies that have smaller dredging fleet, like ourselves. So that is kind of the trend, and we are very encouraged that Corps appears to be stacking up a pretty nice work load next year.

Your next question comes from Ross Berner - Weintraub Capital. Ross Berner - Weintraub Capital: The margins on SSI, were those lower than the company average EBITDA margins prior to the acquisition? J. Michael Pearson: No, I do not. We have some of our best margins with them, but we do not break that out by division, but we were very pleased with what we were seeing from that division.

And SSI is pre-acquisition, their historical performance was in line with ours, as well. Ross Berner - Weintraub Capital: So on of the things that we talked about over the last year in change is that, you had EBITDA margins of 18%, 19%, 20+%, given to the short term nature of the work, even the materials was not a significant issue in the procurement process and the way that your jobs played out. Can you sort of walk me through why we have seen the gradual decline in margins? Is it pricing pressure? Where, given that you are talking about a robust backlog in opportunity, why are we seeing price in margin pressure?

Well couple of things. I mean the current year is no doubt been a tough year. We had a couple of projects that we talked about earlier in the year that definitely had a negative impact on margins. We have also again; we had an active storm season, particularly impactful on the Q3 just in terms of disruption. We are pleased that during the quarter, margins rebounded from where they were earlier in the year. I think going into next year, we are cautiously optimistic, I think we do not want to be irrationally exuberant based on what we are seeing, but we are cautiously optimistic, and I think that again, as we have said we are, sort of in uncertain times, and we do not want to get ahead of ourselves and… Ross Berner - Weintraub Capital: I understand and I appreciate that. I mean is there any reason that your EBITDA margins cannot get back north of 18%, 19%, 20% or do you feel like you are just being judicious at this time?

Well I think long term, that is certainly what we aspire to but I think that the other reason why that we have decided that on a go-forward basis to focus or add the quarterly goal updates and we intend to do that as Chris laid out in his prepared remarks. So, we hope that that provides additional clarity but long term, we certainly aspired to that. If the end markets continue like they are the economic downturn does not have an impact on it, we are certainly going to aspire to that and we always been historically remain and will remain focused on driving margins. Ross Berner - Weintraub Capital: Okay, thank you for that. Given the valuation, you are not trading around three times EBITDA, just give or take what number you want to use for next year so if you do $40 somehow million of EBITDA and you CapEx is $13 million, $14 million to $15 million, why look for acquisitions? Why not find a way to return capital to shareholders given that it is going to be a hard environment for you to get multiple expansions?

Well, we will certainly keep our options open. We are not sure like next year as we go in. We want to make sure that we maintain a strong balance sheet in the environments. We are not sure that buying back shares is the best use of capital but we will look at it as we go to the yearend and see what we think is the best use for the capital and is… Ross Berner - Weintraub Capital: Where are the main, let me just ask this, where did your stock actually need to go to for it to be a reasonable use of your capital?

We do not know. But right now, I do not think we can answer that. Ross Berner - Weintraub Capital: You mean you could maybe run that exercise and sort of, because obviously it is a tough market, it is a tough financial market, it is a tough credit market; it is a tough stock market. The US stock has been destroyed. J. Michael Pearson: We are saying a lot of companies that have done share repurchases were not awarded for it and in this volatile market right now, we just think that the better use of proceeds to continue to build our Company and grow our asset base and we have got limited in the market and reduced stock liquidity and we are moving more shares to just further magnify the effects of illiquid stocks. So, we just do not believe that share buybacks is the best use of our cash right now given our growth goals and potential acquisition opportunities. Ross Berner - Weintraub Capital: Yes, I appreciate that, Mike. Just one thing I would say is we as shareholders think it also as our Company as well. So, you say you build our Company, it is everybody's. J. Michael Pearson: Well, we are not unique. There is a whole host of our peer companies in a similar situation.

We will get back to you on that point.

You have a follow up question from the line of David Yuschak - SMH Capital. David Yuschak - SMH Capital: I was just wondering as far as your bonding capacity share the issues, are you seeing anything out there given what has happened with the whole financial structure between needs for capital and the puzzles that shoot up there, some of the black holes? I am just wondering as you review your bonding capacity need and you have always had a pretty good luck in getting that expanded. Where do you stand right now as far as bonding? J. Michael Pearson: Well, we are in good shape. As we have mentioned earlier, in prior years our bonding capacity was about $250 million. It is now about, we believe $400 million and we have plenty of excess capacity there to grow and one of the aspects of having that additional bonding capability is maintaining a strong balance sheet. So, that is why our cash is up prior year on year and we want to not having constrains in bidding to some bigger projects that we see coming down the road. So, I think we are in great shape with our bonding company. David Yuschak - SMH Capital: Right now your bonding providers are not expressly concerned about having the links from that end or that limit your capacity. J. Michael Pearson: They were not caught up in the mortgage meltdown. They want to back to find out. In fact, they have just carried out an acquisition of another bonding company here recently and I think there is a number two…

There is post product closing with the number two but no, we feel really comfortable with them and we have had meetings with them during the course of the year and we think we are in great shape and as Mike said, we think we got plenty of capacity to execute our plan. David Yuschak - SMH Capital: Then Jacksonville I guess is going to have on a major project out there. I think it was potentially maybe putting out for bids in the fourth quarter. Can you maybe give us an update of that? Is that going to happen or what is your at that? J. Michael Pearson: I am not sure when you are talking about expansion there for sometime. I think it will eventually happen. I know the ports are much occupied right now with getting our cranes back in operation. We have had some damage and so forth but yes, that port area should see some future developments. We have identified about $10 billion of port expansion plan with these ports in eight different states that we anticipate it but I cannot really comment on the time of that in Jacksonville. I am not really sure. David Yuschak - SMH Capital: Okay and then one more question, industry capacity. I know it is the kind of ability to bring business whether it is coming from new program to an administration, whatever. How was your gauge industry capacity right now to do the kind of that is out there relative to what you can do as you said in your own internal capacity and looking at the valuation of the shares, does not that kind of maybe even limit your ability to one, make and acquisition because if you got a public market that is three time in a price of EBITDA. It seems like this is kind of perverse. The private markets are probably been or viewing themselves more valuable than the public markets. Could you address both of those issues for me, please? J. Michael Pearson: Well, actually we do have bonding issues. We are a private equity and that is one aspect that we are worried but…Mark, do you have anything to say unto that?

Yes, I think as Mike said earlier, we want to be cautious in an M&A environment. I think there maybe some opportunities that can amount during the course of the downturn and since we have talked about bonding that may have an impact mainly at the constrained probably if you go by historical time. During the tough economic times, it is reasonable to assume that we are going to see some smaller competitors that might have pressure from their bonding program so there maybe opportunities as we go through this economic downturn but as Mike said earlier and he point out, we are going to be very cautious about pursuing that with the stock price, the stock market, the banking environment. It is maybe prudent to take a wait-and-see attitude on some things but we will continue to monitor our opportunities. We all have worked to be opportunistic but we also have to be mindful of the environment that we are in right now. David Yuschak - SMH Capital: Would you envisioned sometime in 2009 that industry capacity could tighten up considerably particularly as it relates to your own ability to generate business as well as what kind of capacity maybe out there with competitors to bidding on it too because it does will affect, it could be a very positive environment for RFPs? J. Michael Pearson: Alright, okay. Well, certainly we are not fully utilized. There is some surplus capacity we have that could increase our revenue growth at the workers out there and I did not believe that there is a possibility that there maybe some capacity constraints potentially in dredging. As I mentioned, the Hopper Dredges with some of the bigger companies are getting bigger backlogs and getting booked up. So, I know the core concern about making sure they have enough equipment to liquidate the work. We just really do not have the full details on that to comment specifically at this time. That is what we are waiting so like when we are talking earlier about a billion dollars of dredging work, well we have t wait to get the details to see exactly what is our core out of that market because maybe that billion dollars is only $300 million that we can bid on because we do not have the equipment to pay on the others. So, it will just take a little time to find that out.

You have a follow up question from the line of Jay Brosnahan - Westpark Capital Inc. Jay Brosnahan - WestPark Capital Inc.: What do you think yielding end of the year in terms of utilization?

Well we do not publicly announce our utilization but we did. We were pleased with our utilization year-to-date and it is not just capital spend that we do. Things that we have certainly capacity and we think with our capacity and our CapEx program that we will certainly have the equipment to execute our plans. Jay Brosnahan - WestPark Capital Inc.: Okay and then given the valuation of your stock I mean on the IR front plans for road trips, road shows and all the above conference…

Jay, this is Chris. Yes, we will continue on our efforts probably a little bit more on scale than we did at the beginning of the year but we will be attending two conferences in the back half of this year. We have one road show scheduled as well and then we will be working again to target probably attend four to six conferences next year and we will probably do a few road shows in that mix as well.

You have a follow up question from the line of Fred Buonocore - CJS Securities. Fred Buonocore - CJS Securities: Yes, just two quick follow ups. First, did you quantify or can you quantify the revenue contribution in the quarter from SSL, please?

We do not split that up probably but we can tell you generally we are pleased with the area of contribution. Fred Buonocore - CJS Securities: Got it and then can you just give us a quick update on the cruise ship terminal project in Haiti that I guess should be, if it has not already commencing since? J. Michael Pearson: We have mobilized our equipment and people to the site had begun to work. Their jobs kicked off and we are pursuing another opportunities in the Caribbean. Fred Buonocore - CJS Securities: Very good and then actually finally, is there a certain percentage of your backlog that you view as potentially a risk given the current environment?

Generally, the project is awarded. Certainly there is a risk. We do not view that as a high risk. It could be terminated but the risk would come more on the bid opportunities slipping. That is already really where you could see it more that is in our work that is already under contract.

And at this time, we have no further questions in the queue.

Alright and I think that is it and we will go ahead and wrap it up for the quarter and we look forward to talking to you all in three more months. Thanks.

And that concludes today's conference. We thank you for your participation. You may now disconnect.