News

Houston, TX – February 28, 2007 – Comfort Systems USA, Inc. (NYSE: FIX), a leading provider of commercial, industrial and institutional heating, ventilation and air conditioning (“HVAC”) services, today announced net income from continuing operations of $7,499,000 or $0.18 per diluted share and net income of $7,514,000 or $0.18 per diluted share, for the quarter ended December 31, 2006. During the fourth quarter of 2005, the Company reported a net loss from continuing operations of $27,128,000 or $0.68 per diluted share and a net loss of $17,564,000 or $0.44 per diluted share. Excluding a noncash goodwill impairment, net income from continuing operations was $6,827,000, or $0.17 per diluted share in the fourth quarter of 2005.

Bill Murdy, Comfort Systems USA's Chairman and CEO, said, “Comfort Systems USA demonstrated continued revenue and earnings strength in our fourth quarter as we posted an increase in both revenues and net income as compared to the fourth quarter of 2005. Cash flow in the fourth quarter was nearly $23 million. Overall, we are very satisfied with our progress in 2006, and feel optimistic as we enter 2007.”

The Company reported revenues from continuing operations of $268,074,000 in the current quarter, an increase of 14.7% as compared to $233,650,000 in 2005. The Company also reported free cash flow of $22,519,000 in the current quarter as compared to free cash flow of $21,952,000 in 2005. Backlog as of December 31, 2006 was $653,753,000, compared to $678,857,000, as of September 30, 2006 on a same store basis. Backlog as of December 31, 2005 was $680,599,000 on a same store basis.

Mr. Murdy continued, “Our backlog remains extremely robust. As expected, the proportion of our backlog that is attributable to multi-family work has continued to decrease. Our large project multi-family work continues to underperform, especially when compared to our strong results in the commercial, industrial and institutional sectors. We expect that as 2007 progresses the proportion of our work that is large project multi-family will decrease, and we believe that will permit us to perform better on the multi-family work we continue to do and will improve our overall profitability mix.”

The Company reported net income from continuing operations of $28,717,000 or $0.70 per diluted share and net income of $28,724,000 or $0.70 per diluted share for the year ended December 31, 2006. The Company reported a net loss from continuing operations of $14,869,000 or $0.38 per diluted share and a net loss of $6,226,000 or $0.16 per diluted share in 2005. Excluding the noncash goodwill impairment and a charge to write off certain deferred debt costs, net income from continuing operations was $19,565,000 or $0.49 per diluted share for the twelve months ended December 31, 2005.

The Company reported revenues of $1,056,525,000 from continuing operations for 2006, as compared to $892,549,000 in 2005, an increase of 18.4%. Free cash flow for 2006 was $17,118,000, as compared to $31,954,000 in 2005.

Bill Murdy concluded, “During 2006 we made significant investments in our core business, including training our people, adding to our service sales resources, and expanding in new locations. Based on these investments, and on our sense that commercial and industrial activities in the majority of our markets remain strong, we are optimistic that our net income and revenues in 2007 will increase as compared to 2006.”

As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Thursday, March 1, 2007 at 10:00 a.m. Central Time. The call-in number for this conference call is 1-210-234-0000. A replay of the entire call will be available until 6:00 p.m. Central Time, Thursday, March 8, 2007 by calling 1-203-369-1012.

Comfort Systems USA® is a premier provider of business solutions addressing workplace comfort, with 60 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 nonresidential 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, 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 selfinsurance, 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.