1035983--2/28/2006--COMFORT_SYSTEMS_USA

related topics

{tax, income, asset}

{control, financial, internal}

{cost, contract, operation}

{acquisition, growth, future}

{loss, insurance, financial}

{personnel, key, retain}

{financial, litigation, operation}

{condition, economic, financial}

{stock, price, share}

{provision, law, control}

{cost, regulation, environmental}

{interest, director, officer}

{competitive, industry, competition}

Because we bear the risk of cost overruns in most of our contracts, we may experience reduced profits or, in some cases, losses under these contracts if costs increase above our estimates. Our backlog is subject to unexpected adjustments and cancellations, which means that amounts included in our backlog may not result in actual revenue or translate into profits. We may be adversely impacted by the seasonal and cyclical nature of the markets we serve, and an economic downturn in the industries we serve may result in certain of our customers being unable to pay us on a timely basis, or at all, and lead to a decrease in demand for our services. Our use of the percentage-of-completion method of accounting could result in a reduction or reversal of previously recorded revenues or profits. Intense competition in our industry could reduce our market share and our profits. If we are unable to attract and retain qualified managers and employees, we will be unable to operate efficiently, which could reduce our profitability. Past and future environmental, safety and health regulations could impose significant additional costs on us that reduce our profits. We are effectively self-insured against many potential liabilities, and our risk management policies and procedures may leave us exposed to unidentified or unanticipated risks. If we experience delays and/or defaults in customer payments, we could be unable to recover all expenditures. Actual and potential claims, lawsuits and proceedings could ultimately reduce our profitability and liquidity and weaken our financial condition. Our recent and future acquisitions may not be successful Our common stock, which is listed on the New York Stock Exchange, has from time-to-time experienced significant price and volume fluctuations. These fluctuations are likely to continue in the future, and our stockholders may not be able to resell their shares of common stock at or above the purchase price paid. If we do not effectively manage our growth, our existing infrastructure may become strained, and we may be unable to increase revenue growth. Our earnings for fiscal year 2005 were negatively impacted by impairment charges. Earnings for future periods may be further affected by additional impairment charges. Failure or circumvention of our disclosure controls and procedures or internal controls over financial reporting could seriously harm our business. Our charter contains certain anti-takeover provisions that may inhibit or delay a change in control. Failure to successfully comply with Section 404 of the Sarbanes-Oxley Act of 2002 on a timely basis could seriously harm our business.

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1035983--2/28/2006--COMFORT_SYSTEMS_USA_INC