News

HOUSTON--(BUSINESS WIRE)--Comfort Systems USA, Inc. (NYSE:FIX - News), a leading provider of commercial, industrial and institutional heating, ventilation and air conditioning ("HVAC") services, today announced net income of $1,806,000 or $0.04 per diluted share, for the quarter ended March 31, 2007, as compared to net income of $4,327,000 or $0.11 per diluted share, in the first quarter of 2006.

Bill Murdy, Comfort Systems USA's Chairman and CEO, said, "As we predicted in our recent press release, our multi-family activities struggled in the first quarter as one of our operations that specializes in large multi-family projects posted a significant loss. Despite that loss, we were solidly profitable overall as our core commercial and institutional businesses demonstrated strength and further improvement."

The Company reported revenues from continuing operations of $249,640,000 in the current quarter, an increase of 5.6% as compared to $236,385,000 in 2006. Following a very strong fourth quarter cash flow, the Company reported negative free cash flow of $15,277,000 in the current quarter which was funded entirely by existing cash balances. Backlog as of March 31, 2007 was $700,522,000, compared to $653,753,000 as of December 31, 2006, with $12,476,000 of the increase resulting from our acquisition in Tucson. Backlog as of March 31, 2006 was $726,727,000.

Murdy continued, "Total backlog was up significantly as we enjoyed a strong winter booking season. We continue to experience strong underlying industry conditions and the majority of our operations are performing very well. We expect that as we continue to finish struggling projects at the multi-family operation that we mentioned earlier, we will experience some further disappointments, especially in the second quarter. However, we expect multi-family results in the second quarter will improve from the first quarter and that the improvement will continue through the rest of the year."

Bill Murdy concluded, "Despite the weakness that we experienced this quarter we continue to believe that our 2007 profitability will improve as compared to 2006 results."

As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Thursday, May 3, 2007 at 10:00 a.m. Central Time. The call-in number for this conference call is 1-210-234-0015. A replay of the entire call will be available until 6:00 p.m. Central Time, Thursday, May 10, 2007 by calling 1-203-369-3944, and will also be available on our website on the next business day following the call.

Comfort Systems USA® is a premier provider of business solutions addressing workplace comfort, with 61 locations in 53 cities around the nation. For more information, visit the Company's website at www.comfortsystemsusa.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current plans and expectations of Comfort Systems USA, Inc. and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, among others, national or regional weakness in non-residential construction activity, difficulty in obtaining or increased costs associated with bonding, shortages of labor and specialty building materials, the use of incorrect estimates for bidding a fixed price contract, undertaking contractual commitments that exceed our labor resources, retention of key management, the Company's backlog failing to translate into actual revenue or profits, errors in the Company's percentage of completion method of accounting, the result of competition in the Company's markets, seasonal fluctuations in the demand for HVAC systems, the imposition of past and future liability from environmental, safety, and health regulations including the inherent risk associated with self-insurance, adverse litigation results and other risks detailed in the Company's reports filed with the Securities and Exchange Commission. Important factors that could cause actual results to differ are discussed under "Item 1A. Company Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2006. These forward-looking statements speak only as of the date of this release. Comfort Systems USA, Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Comfort Systems USA, Inc.'s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Financial tables follow

Contact:
Comfort Systems USA, Inc., Houston
Chief Financial Officer
William George, 713-830-9600