William F. Murdy – Chairman of the Board and Chief Executive Officer William George III – Chief Financial Officer Thomas N.

Tanner – Chief Operating Officer

Matt Duncan - Stephens Inc. Rich Wesolowski - Sidoti David Uschak - SMH Capital Tahira Afzal - KeyBanc Josh Wilson - RLR Capital

Thanks, Marsha. Good morning, everyone.

Welcome to Comfort Systems USA’s second quarter earnings call. Our comments this morning as well as our press releases contain forward-looking statements within the meaning of the Private Securities Litigation Act of 1995.

What we say is based on the current plans and expectations of Comfort Systems USA. Those plans and expectations involve risks and uncertainties that can cause actual future activities and results of our operations to be materially different from those set forth in our comments.

You can read a more detailed listing and commentary concerning our specific risk factors in our Form 10-K as well as in our press release covering these earnings. On our call with me this morning are Bill Murdy, Comfort Systems USA CEO and Tom Tanner, our Chief Operating Officer.

Bill Murdy will open our remarks.

Thanks, Bill. Welcome everyone.

We are very pleased to report the quarter record revenue and earnings for Q2 ’08. We’re reporting $0.38 per share versus $0.25 a share for the comparable quarter in ’07.

That’s an increase in excess of 50%. This improvement we believe demonstrates the productivity and delivery capability of our outstanding operations around the country.

Our revenues in Q2 of $355 million and $318 million of same-store basis compared to $281 million for the comparable quarter in ’07. Total backlog at June 30 was $780 million.

Backlog on same-store basis was $701 million versus $720 million on June 30, 2007, at a decrease of $19 million. However, we exclude the purposeful downsizing at Atlas which resulted in a $37 million decrease in Atlas’ backlog.

Our overall backlog is actually up year-over-year. I’m sure Tom will have some more to say about the backlog including some remarks on booking since the end of the second quarter.

Having mentioned Atlas, let me add that it continues on its recovery and improvement plan and that it effectively broke even in the second quarter. Cash flow also remains very strong.

At the six months ended June 30, it was $19 million versus $4 million for the first six months of 2007. Our outlook for the rest of 2008 and into 2009 is positive.

We have recently added some very strong operations and our overall productivity and continuing ability to get additional new construction, retrofit work and service opportunities, some of which by the way is energy-efficiency driven, allows us to be very positive even in questionable economy. I’ll have more to say in conclusion before the Q&A but at this point, I’d like to turn the mike over to Bill George for some detailed comments on our financial results.

Bill?

Thanks, Bill. Let me just take a minute or two to fill in a couple of additional details in our results.

The first item that I want to update is some data relating to our progress in accruals at Atlas. As Bill Murdy has indicated, Atlas is on track with its recovery plan and it approximately broke even in the second quarter as compared to a $3.6 million loss in the second quarter of 2007.

Atlas revenues this quarter were down $1.2 million compared to one year ago and Atlas backlog has approximately $37 million less than it was one year ago. Also, you may recall, at the end of 2007, Atlas had a total of $6.2 million in accruals relating to claims and contingencies on certain of its Legacy jobs.

At the end of the second quarter, those accruals stood at $2.7 million and the new team at Atlas has now resolved approximately two-thirds of those projects including all of the projects in the Mid-Atlantic and the California markets. The resolution so far is within the expected parameters and based on our substantial progress, we feel encouraged that it remains our best judgment, that these accruals are sufficient in light of remaining risks, even though we expect to vigorously contest many of these matters.

Positive pre-cash flow was a remarkable $22.8 million this quarter which is a historic high watermark for second quarter. Cash balances remain strong at $101.5 million despite our continued expenditures on acquisitions, our dividend and regular stock repurchases.

Since year-end, our stock repurchase program has continued to return money to our stockholders in a disciplined way and as of today, we have retired 1.9 million of our outstanding shares and returned $23.7 million of cash to our shareholders through this program since we began buying shares 14 months ago. Our balance sheet remains rock solid with strong cash balances and nominal debt.

Where it’s prudent to do so from a return on investment standpoint, we continue to deploy our balance sheet to strengthen our operations. For example, by purchasing equipment instead of leasing it and investing in modern or improved physical plant and technological resources.

We continue to make even more important investments in training and service growth and we believe that these moves will improve our results and opportunities for years to come. Overall, our backlog remains strong and excluding the plan decreases and backlog at our Atlas subsidiary, it increased from a year ago.

We’re optimistic about both our short-term and long-term prospects and through continued discipline, selection, execution, and financial practices and thanks to the best technical and project management workforce in the industry, we can be successful in any market conditions. That’s what I have on financials so I’ll introduce Tom Tanner, our Chief Operating Officer.

Tom?

Thanks, Bill. Good morning, everyone.

Our very strong results for the quarter are the direct result of the efforts of all of our talented and dedicated team members. We would certainly like to thank each of you.

The great majority of our companies were very profitable during the quarter. Within our operations, both our construction and service divisions performed very well.

Our construction results underscored the very positive effects of our continuing focus on project selection, project pricing and especially our focus on project execution which has been greatly enhanced by our commitment to improve our pre-fabrication capabilities. Our goal is to be the most cost-effective mechanical contractor in all of our markets.

Our service results continued to improve as we focused on the growth of our preventive maintenance agreement phase by implementing appropriate process and procedures to increase our technicians efficiency by providing training at all levels within our service groups. We believe the increasing and more consistent profitability from our service group will be a very key factor in our future financial results especially if there’s an economic downturn.

Our energy services group continues to expand its resources to either provide direct project opportunities for operating companies or to assist both of the companies with project opportunities that arise from their existing customer base. In the same context, there are increasing opportunities where our knowledge and experience with green building LEED certification requirements is definitely enhancing our ability to partner with our customers to provide long-term energy efficient solutions with our facilities.

Our resources and experience of analyzing and providing a range of energy efficient solutions to our customers allows us to consistently differentiate ourselves from our competitors. As it has been previously mentioned, we continue to seek improvement from our Atlas operations as they perform at a break-even level for the second quarter in a row.

The new management team has continued to right-size the company as is evidenced by the year-over-year backlog reduction of almost $37 million. All of the projects in the Florida Panhandle are now finished which leaves only two projects in the Tampa area to complete.

The larger of those two projects will be completed in the fourth quarter and the last remaining Florida project will be finished in the early part of 2009. As Bill has previously mentioned, we have closed out all of the Legacy projects in the Los Angeles area and in the Mid-Atlantic region.

We believe that we have the appropriate reserves to close out or successfully litigate the three Florida Panhandle projects without any additional financial impact. We believe that Atlas will continue to perform at a break-even level for the remainder of the year and then it will make a positive financial contribution in 2009.

As we move into the second half of the year, our backlog is near record levels and our same-store backlog year-over-year is actually up slightly when you exclude the plan of the almost $37 million reduction in the Atlas backlog. Project bookings in July are consistent with prior years and most of our project pipelines are still quite active.

However, as we said at the end of the first quarter, we certainly recognize the potential impact of the weakness in the overall economy, plus we are focused on reducing costs wherever possible. Several of our operating companies are involved in contingency plans to minimize the potential negative impact of a downturn in their respective market area.

That being said, we continue to be optimistic about the remainder of 2008 and beyond. We have a near record backlog, very efficient operations, a growing service business, an effective and growing energy services group, and strong momentum from our past and current success.

We continue to strengthen our operations as we are able to attract top talent from our industry competitors. Our individual operating leadership teams continue to actively manage their businesses everyday.

We continue to believe we will have improved financial performance in 2008 as compared to 2007. Again, I would like to thank all of our almost 7,000 team members for a great first half of 2008.

I’ll turn it back to Bill for his wrap-up and then questions.

Thanks, Tom. In terms of wrap-up, I just want to anticipate a potential question that relates to acquisitions.

We are not announcing any new acquisitions today. We are working on some.

We still are very interested in growth via prudent acquisition. Fortunately, there are lots of targets and lots of geography.

We know we are maintaining our disciplines for what we are willing to play and what terms we are interested in having, recognizing that whatever we decide now will have ramifications in the future. We’re not wanting to replicate some of the early problems that we have when we were very inquisitive.

So we are on a prudent acquisition path of maintaining our disciplines, ready to act but ready to cut off negotiations if we can’t reach proper terms and conditions. Fortunately, as I said, there are lots of targets and lots of geographies to deal with.

So our focus, as you heard in Tom’s remarks and some in mine, our focus really is productivity, efficiency, a bottom line-oriented principle. With that, I’d like to throw it open to questions.

The first question I got, is if I look at your new construction and installation sales, it looks like so we’re up 30% year-over-year based on the revenue breakdown you provide between new construction installation and then service, repair and retrofit were up 20% from the first quarter. Can you talk about what’s driving that and maybe also address what percent of capacity you think you’re operating right now?

From the first quarter, new construction was up roughly the same as; both sides were up about the same amount. I think there’s robust underlying markets for construction right now.

Most people on this call know we are a late cycle player so we continue to experience very, very robust conditions. Our companies, the vast majority of them, have their largest backlog that their organization’s ever had or very near their largest backlog that that particular organization has ever had.

Quite frankly, it’s good times for new construction. Meanwhile, we’re actually pleased that our service operations have been able to track that growth pretty closely, from the first to the second quarter.

Now, not quite year-over-year but services is an area where you can continue to grow it over time and obviously, there is a tend line that continues. Meanwhile, new construction is the more cyclical part of our business and so there’s a wave that goes around that trend line.

I would like to add this, Matt. We’re seeing continuing robustness in the schools, hospitals, government especially military, work that we’re accessing and we think that continues.

We certainly see that in our pipelines in that part of our backlog. The capacity question is always an interesting one.

We have turned down some work. We have missed some work, certainly that we don’t regret missing as it turns out.

It’s always a difficult question. We will have a tendency here probably to take on more service opportunities than we can comfortably do because we’re very interested in that business.

On the construction side, we will be very careful because of the necessity to have right management and field supervision which is always a concern and always a shortage.

I’m curious, it sounds like Atlas was break-even again this quarter. I’m looking at your operating margins and if I exclude Atlas year-over-year, it looks like operating margin would have been down about 30 basis points.

So barely down, but still down a little bit. Is that really just a makeshift towards construction that’s driving that or is there something else maybe in play there?

I think, first of all, it’s not much of a difference. We had really good margins last quarter form the volume that we had.

Obviously, volume is up a lot. I would note that, this is the quarter where a lot of equipment is delivered.

It’s a quarter where frankly our average project size remains very large. Your margins are a little lower on larger average project sizes because there’s more revenues that are passed through.

You know, subcontractors and obviously equipment. I say those are some of the factors, but we’re happy to have our margins remain at these remarkable levels and through the first six months, our margins are up rather considerably compared to last year.

Looking at pricing on projects that you’re booking right now, is pricing holding pretty steady? Are you able to get the same kind of margins and the things that you’re putting into your backlog today that you were maybe 6, 12 months ago?

No, we continue to see most of our operations, consistent pricing at past levels, and we’re focused on maintaining our pricing. One of the reasons is we’re certainly focused on being very cost-effective so we can maintain our margins in this economy.

We really at this point have not seen any deterioration in margins.

Bill George, the stock buyback. How much did you guys buy in the quarter, how many shares and what did you pay for those?

During the second quarter of 2008, we bought 438,760 shares at an average price. That time range was actually our highest average price, it was above 13, it was about what our stock’s trading today, about $13.50.

Overall, over the course of our entire plan, the 1,000,009 that we bought, the average price has been about $12.70.

Last thing, for you Bill Murdy, I appreciate the commentary on the acquisitions. Maybe you can remind us a little bit what your acquisition focus is right now and with some of the uncertainty in the economy, are you gearing with your focus a little towards the service side, some of the things that kind of stay stable going forward or is it really all comers right now or at the right price?

Address that a bit if you could.

It’s certainly not all comers at the right price. We are looking for what we call full-service mechanical where we have an increment of service, repair, retrofit and also new construction and there’s sort of a cycle there that we can bite into.

More than that, backing up a bit, we’re looking for go-to mechanical in their jurisdiction. We want to be associated with the best possible non-union mechanical in whatever jurisdiction we’re in.

We don’t intend to pile on where we already are. So that describes a lot of the path.

Other qualitative things are management, obviously. We might management that is motivated, wants to stay, wants to be part of Comfort Systems, wants to continue to operate at the level they been operating or better and wants to keep its workforce together and continue to pursue what its been doing.

So it’s not just the numbers, although the numbers are very important. We are certainly conscious of the potential dilution.

That’s why we want to be very reasonable, prudent and looking at this a little more long-term way, both for ourselves and for the target.

Bill George, on Atlas, and please correct me if I’m wrong. You said that revenue was down $1.2 million versus June ’07?

The revenue was roughly flat. Last year, they were at about $25 million.

They were about $1 million below that this year. The continuing operations are probably closer to a low 80’s kind of range but we still have revenue coming through on those projects in Florida, both as we close them out and we have a couple that we’re still working on, reasonably, actively in Tampa.

Since we have the basis part of the organization down where we think it will go and we just have the small increment that will be there for several more weeks, or a couple more months.

Maybe expectation for the year is $80-85 million and is that a basis from which you expect to grow in ’09 and beyond?

I would say $80-$85 million, $80 million would be the continuing operations. I don’t know if we’re worried about growth at this point.

I think we just want to see them stabilize and make good money. For this year, we’ll probably have a little higher than that from Atlas just because, as I said, we have that Legacy revenue.

Do you have an idea whether the margins earned on the acquired revenue from all of the companies in aggregate is above or below the margins that you’re working off from the Heritage-Comfort businesses?

I think it’s probably above, if you take out amortization. We had a couple of those organizations have fairly remarkable quarters but its fair to say that we expect them, the four or five acquisitions that we’ve done as a group, to perform roughly equivalent.

They’re pretty representative of a cross section of our other companies, very similar, just top quality organizations in good markets. I would say that they absolutely taken as a group are very similar to the rest of Comfort taken as a group.

The big real estate agencies reported a noticeable drop in non-residential starts in June. Given that most of your companies were filled up heading into the summer, and I imagine not as aggressively pursuing work as would normally be the case.

How far a handle do you think you have on any changes in competition or the market that have occurred in the last couple of months and the potential effect on bid margins?

Right now, we haven’t seen a lot of evidence in the markets that we’re in, those projects that we’re going after, a significant impact in margin at this point. You’re certainly correct.

This is not one of the more active times of the year when we’re adding to our backlog. That will begin again towards the end of the third quarter and into the fourth quarter.

We may see a difference at that point but we’re not really seeing it today.

Tom, you had mentioned that you’re reducing costs in response to your economic forecast. What sort of costs are these and are you guys still hiring at the majority of your companies?

We’re probably hiring at about half of our companies because, as Bill mentioned, we have a record backlog. In the other companies, we’re calling out the field people and also some office people that have not performed up to expectations so we’re getting some cost reductions there.

Each business that we have is looking at their org chart on a monthly basis and analyzing the requirements that they have going forward. We’re continually looking at that and seeing opportunities where we can cut costs.

Rich, that’s a continuous activity, looking at the productivity and management improvement, and sometimes that results in letting persons go. Sometimes it relates to combining functions, sometimes it relates to working with other Comfort companies to accomplish things.

We’re constantly doing that. That’s part of this whole productivity increase that tried to cultivate as a culture in the company.

Finally, Bill Murdy, at your current pace of buybacks you’re going to exhaust the authorization in other quarters and increasing it little by little. Has there been any discussion of a larger authorization that would send maybe a more definitive message to the market about your ability to repurchase a big slug of equity if you saw fit?

I think our Board, representing stockholders is mindful of that. I’m mindful of that possibility.

We’re not resistant. We keep reloading our authorization.

We, by the way, think that there are a lot of other opportunities for us, growing many of our current platforms, certainly growing our service which has some front-end costs to it, and then prudent acquisitions. We have uses for cash.

One of the things I always appreciated about non-residential construction was the breadth of markets that you conserve and earlier, Bill, you had indicated what markets were looking good for you. Is there anything that you see right now where the markets don’t look as good, where maybe you’re shifting some resources or doing some things internally to take advantage of some of the things that you said you are seeing as a positive versus maybe there’s some things out there that you’re maybe already seeing some signs of recession but some of the things that you are doing can help offset some of that erosion.

I don’t know if aggregates are all that constructive here. We’re all over the country and one market will be strong in a certain sector, another market might show a little weakness and we’re a little microcosm anyway.

We’re not Dodge here. We don’t have all the data either, that’s the other thing.

I would say that we’re not particularly positive about the retail sector or the hotel sector. In certain parts of the country, I certainly wouldn’t think we’re going to do a whole lot of new high-rise multi-towns.

So it’s a mixed bag, David. It really is.

We don’t see any general downturn anywhere. In certain pockets, there’s certain sectors that are just not as robust as they have been.

In the data, you don’t see, we only seen any actual weakness, I guess for a long time, we saw any actual weakness in the upper Midwest and then, we mentioned on our call in the first quarter, some weakness in San Diego. We’re worried about some of our bigger markets, like Phoenix, just based on statistics, but generally speaking across the country, if the downturn’s coming, it’s not showing up yet and most of our companies have very high backlogs.

One thing to keep in mind about Comfort Systems is that we are a company in our low 40’s, 42 or so P&Ls, 35 or more are in smaller markets, in places like Little Rock or Albany or Mobile. They are in the second, what used to be called, second airplane cities.

They tend not to have the extremes frankly that you see in the southern Florida or a southern California. They tend frankly not to get as robust during expansions and they tend not to fall off the planet during downturns.

It tends to be a very small number of players in those markets who all know each other. If volume happens to go down, pricing tends to still stay at typical levels.

Frankly, in an upturn, they don’t abuse each other as much. In an upturn, if you have been doing work with somebody for 35 years in those small markets, you don’t necessarily take advantage of your pricing power quite as much.

That does pay off in the downturns. Generally speaking, things are pretty good.

EMCOR commented on their call about how optimistic they’re seeing the retrofit market and the energy markets evolving. It just sounded like they we’re extremely optimistic in that sector.

Where would you guys kind of match up with them as far as seeing the same kind of enthusiasm for that market versus where you may be different? Do you kind of share that same kind of view at this point in time or you’re a little bit behind where EMCOR is, maybe some of the projects are bigger there than what you get?

Let me comment on this. EMCOR has two energy-oriented businesses as we know.

One is purely the refining, petrochemical, mechanical market, heat exchanger, retrofit, etc. They certainly are very busy in that sector.

The other is where we are and that’s energy efficiency mostly in existing structures although we certainly pay a lot of attention to energy efficiency and design in new construction. We’re of the same mind as them.

We’re focusing on that, we’re trying to get traction in energy efficiency for retrofit and service. We’re doing work for a number of national end users who have lots of properties that they’re interested in making as energy efficient as they can and they recognize that their HVAC mechanical plant is a good portion of that electric usage.

They can approve it by retrofitting. We’re positive on that, Dave, and I think that’s what EMCOR is saying as well.

Tom, you listened to their call.

I think if you take out the Onspect business which was a big part of their increase which we obviously don’t have. We don’t have an electrical piece which often times is the biggest opportunity to get energy efficiency.

If we were to compete in the HCAC market, I think our group and our people are as talented as anyone in the industry. We continue to add to that group because more and more opportunities in all of your operating companies where they have existing clients or new clients where we’re going in.

We’re providing energy analysis for them, providing them with several different alternatives as how they can save costs and then we’re moving ahead with projects. On the new construction area, we’ll take a design as Bill mentioned and we’ll go through and give them several alternatives from the most efficient long-term cost to the most-efficient time cost.

Let the customer make a decision on that basis. We are very active in every one of those markets that we serve in that area.

I couldn’t be more pleased with the group of people that we put together.

Just one last question on Atlas. You mentioned about breaking even.

As you look into 2009 for the operation, what kind of revenue capacity do you think they could deliver next year and how much can you get that profit to build on an even margin in 2009 versus break-even. You’re hearing a lot of places where what once was considered a condo market, they’re now looking at more and more apartments because of what happened with the condo market.

If you do see an up in 2009, boost the prospects there as well with the profitability there to what you’ve seen.

We certainly think that their revenue will run between $60-$70 million next year broken up between the Mid-Atlantic region, Washington, D.C., Maryland, Northern Virginia, and the Texas market which is principally Houston, Dallas, San Antonio and Austin. Our expectation is to deliver a reasonable margin in that work in the range of 3%-5%, operating income on that work.

That is the plan and that’s what our management team there is committed to delivering in 2009.

I just had a couple of questions on your booking to start with. If I look at your net bookings for the quarter, year-on-year they seemed to have grown naturally 8%.

If I look at the last several quarters, that’s been a fairly stable rate, around 8%. If you look at all of the third quarter of the year, you saw a fairly outsized quarter in a sense in the third quarter.

I know third quarter tends to be, kind of a seasonably big quarter for you. How should we look at the comparison on a year-by-year basis as we go into the next quarter on the bookings levels to start with?

If what you’re looking for is what our expectations would be as far as backlogs and bookings is for the third quarter, I would say that, I think that we will continue at very high levels. We will as you just pointed out have, we will typically have seasonably very strong revenues obviously that is the burning of backlog, as far as, we have financial calls once a month where we review each of our companies.

The signals that we are getting, the very direct signals that we’re getting from the people that run those markets are that they still see strength, project pipelines in their markets. We don’t want to be like, we don’t want to stick our heads in the sand.

There’s a lot of things going on out there in the economy, but quite frankly, the conversations that we’re having, the data that we’re getting makes it very hard for us to start predicting that it’s going to be anything other than pretty good. Tom, would you agree with that?

One of the qualities of Comfort Systems companies is that other than Atlas which is in the multi-family business, all of our other companies can provide a broad range of services whether it be university work, school work, hospital work, military work, prisons, casinos. So we have the great ability in our market to go from one sector to the other when one declines and one increases.

We’re very optimistic that we have that expertise. We also have expertise from one operating company that we can give to another operating company if they’re looking to move in to a sector where they haven’t been before.

We think that bolds well moving forward, the flexibility that we have in all of our operating companies.

Just extrapolating then, an 8% year-on-year booking accrual, that sort of implies for the $400 million plus in bookings in the third quarter. I know you don’t provide guidance around that but did that sound overly aggressive or is that something that is achievable?

When I talk to you about these things, I always learn things. I got to tell you, I don’t have any comment whatever on the $400 million number.

You look at things that are very nuanced and an interesting way. The things that I look at you know more.

I look a little bit at a concept book to burn. I feel pretty good about that.

If you had told me, that we would have the revenues that we had this quarter, and that our backlog would behave the way that it behaved this quarter, I would have felt that was just better than I would have frankly hoped for. Typically, that’s just not a way of looking at it; I have a hard time commenting on that.

Even if you look at your burn rate then in the second quarter, it seems if I look over your last five quarters, it was definitely higher and I’m wondering, is that also because if you look at the bookings profile in the second quarter, would you say that there was a higher mix perhaps a walking rub and if that is the case would that be tied to the fact that you seen the retrofit piece of the business pick up more than let’s say some of the more traditional new construction pieces?

One direct metric that you can look at to see if that was happening is average project size. I’ll be honest with you; I expected average project size to start to come down a little.

It hasn’t yet. It’s the same at the end of the second quarter as it was, for example, at year-end.

It is something I kind of expected. I expected it from a number of angles.

One, we’re transitioning our multi-family which is one of our largest average project sizes. We are getting significant traction because of like energy efficiency sales on the retrofit area and those project sizes tend to be smaller.

One of the reasons why it’s hard for me to talk about sort of gross booking numbers is, and you and I have talked about this, I think you can’t look at our backlog sort of the way you would look at a manufacturer’s order book. It’s so nuanced what’s inside it.

We have had many years where our backlog was going down and our revenues were going up. In fact, most of the time over the course of our history, when our backlog was going down, our revenue was going up.

The things that happen inside a backlog are so important such as project size, such as how far in advance are people committing in other words what’s their feeling about future resource availability. Since it’s the only forward-looking statistic that we provide, backlog, it does get an extraordinary amount of focus.

That being said, I think that the conversation you get from a guy like Tom Tanner abut what’s happening are frankly just more important.

I guess that would sort of be captured in your bookings number with your backlog number, right? It seems you’re saying that as you go into a cycle, your backlog is seeing a decline.

That your bookings number in essence was a walking work in the quarter which further supports their top line. Would that be fair to say?

If I understand what you’re saying, another way to put it that is at some point, as activity levels weaken and as we start to put this terrific backlog that we sort of had build-up As we start to burn through that, we’re going to have to make a choice at some point between price and revenue and our plan is to choose price. I think that’s another way of getting us out.

So essentially what you’re saying is that, you might lose a bit of visibility with backlog, but you know [inaudible] is actually a retrofit business. From what I understand, it does high margins, so that’s going to help you and that’s going to remain consistent.

I definitely think that will be a positive factor that will offset some of any weakness and the question is does it offset some, a lot, or all of it.

Just one last question and that has to do with your operating margins. Again, if I look at the third quarter, the fact that you do have a strong second quarter means that the margins tend to sequentially go up in the third quarter.

Given that you’ve seen very strong margins in the second quarter, but you do expect season trends to continue to be similar as in several past years, should we expect the same kind of phenomenon to happen in the third quarter?

A few comments. One important thing is our margins do tend to go up as the year goes on.

They will typically go up from the first quarter to the second quarter and from the third quarter to the fourth quarter as we close out projects. That said, if you looked at our company over the last 11 quarters, if you looked at consensus estimates which are typically billed in a logical progression.

We’ve beat them now three times by a nickel or more and we’ve missed them twice by a nickel or more which points out that there is just enough variability in as small a measurement as the quarter’s results in our industry. That’s almost always going to be a more important factor just how things break in the quarter.

However, I do think that generally speaking, the trends, the underlying trends that you’re talking about, they’re still there, they’re still valid. We just had a really great quarter so that’s going to create obviously a tough comparable.

Just a quick question. I wanted to make sure I’m understanding backlog in the right way.

If I back off the Atlas decrease and look at non-same-store backlog, there was the decrease there. Am I looking at it the right way and is that acquired businesses that had a backlog decrease?

What’s it related to?

If you saw that, that would be acquired businesses that had a backlog decrease, probably driven by one or two of the new companies that we bought that had very big backlogs on the day that we bought them. It wouldn’t surprise me.

If you get down that small of a sample size just to a couple companies, the day that they book a $10 million job, if you got a $40 million backlog or a $50, $60 million backlog and you book things in increments of $10 million, it’s not surprising at all to see one or two companies. I have a schedule where I have any one of our subsidiaries and I will do side by side, month over month, and quarter over quarter backlogs and if you went down that column, you’d see a ton of variability within a company because it’s just so lumpy.

So you’re probably just absolutely right, quite frankly, and it’s probably just lumpiness.

Second question, have you, do you have any evidence, anecdotal or otherwise that in this environment, where construction, forward-looking maybe slowing down, be it off of a high base projects or getting completed more quickly right now and therefore the later stage, HVAC stuff is coming more quickly or the pace of project completion is going at the rate you guys would normally expect?

I don’t see any acceleration of projects, at the pace we expect or frankly a little slower. We had some projects that because of permitting issues, some financing issues, have actually been pushed back a little bit.

Most schedules that are put together today are pretty aggressive construction schedules to start with because they want the project complete. So we’re not seeing an acceleration in work in general.

Thank you, Marsha and thank you everyone for being with us on the call. Some good questions and I hope we had some good answers.

As I mentioned, we’re very happy with our results and it’s a result of a lot of internal work relating to productivity that we’re very proud of. Thank you all for being on the call.