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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10 - Q

(Mark One)
   [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007

                                       OR

   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                FOR THE TRANSITION PERIOD FROM ______ TO ______.

                        COMMISSION FILE NUMBER 001-32865

                                    KSW, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                      Delaware                         11-3191686
          -------------------------------        ----------------------
          (State or other jurisdiction of           (I.R.S. Employer
           incorporation or organization)        Identification Number)

   37-16 23rd Street, Long Island City, New York          11101
   ---------------------------------------------       ----------
     (Address of principal executive offices)          (Zip Code)

                                  718-361-6500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                 YES [X] NO[ ]

         Indicate by check mark whether the  Registrant  is a large  accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer and large  accelerated  filer" in Rule 12b-2 of the Exchange
Act. (Check one):

Large Accelerated Filer [ ]   Accelerated Filer [ ]     Non-Accelerated Filer[X]

         Indicate by check mark whether the  Registrant  is a shell  company (as
defined in Rule 12b-2 of Exchange Act). Yes [ ] No[X]

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date:

                                                     Outstanding at
                  Class                              August 7, 2007
      ----------------------------                   --------------
      Common stock, $.01 par value                     6,191,824

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<PAGE>

                                    KSW, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                           QUARTER ENDED JUNE 30, 2007

                                TABLE OF CONTENTS

                                                                       PAGE NO.
                                                                       --------
PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements

             Consolidated Balance Sheets -
             June 30, 2007 and December 31, 2006                            3

             Consolidated Statements of Income -
             Three and six months ended June 30, 2007 and 2006              4

             Consolidated Statements of Comprehensive Income -
             Three and six months ended June 30, 2007 and 2006              5

             Consolidated Statement of Stockholders' Equity -
             Six months ended June 30, 2007                                 6

             Consolidated Statements of Cash Flows-
             Six months ended June 30, 2007 and 2006                        7

             Notes to Consolidated Financial Statements-                    8

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations                     13

Item 3.  Quantitative and Qualitative Disclosures
         about Market Risk                                                 18

Item 4.  Controls and Procedures                                           18

PART II  OTHER INFORMATION

Item 1   Legal Proceedings                                                 19
Item 1A  Risk Factors                                                      19
Item 2   Unregistered Sales of Equity Securities and
         Use of Proceeds                                                   19
Item 3   Defaults Upon Senior Securities                                   19
Item 4   Submission of Matters to a Vote of Security Holders               19
Item 5   Other Information                                                 20
Item 6   Exhibits                                                          20

SIGNATURE                                                                  21
INDEX TO EXHIBITS                                                          22

All  references in the  accompanying  consolidated  financial  statements to the
number  of common  shares  and per share  amounts  are based on the  retroactive
effect of the stock dividend declared on May 8, 2007.

                                        2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                            KSW, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                June 30, 2007     December 31, 2006
                                                               ----------------   -----------------
                                                                 (unaudited)
<S>                                                            <C>                <C>
ASSETS
Current assets:
   Cash and cash equivalents                                   $         17,223   $          14,085
   Marketable securities                                                    707                 663
   Accounts receivable                                                   11,964              13,205
   Retainage receivable                                                   6,489               5,566
   Costs and estimated earnings in excess of
    billings on uncompleted contracts                                       391               1,017
   Prepaid expenses and other receivables                                   491                 247
                                                               ----------------   -----------------
      Total current assets                                               37,265              34,783

Property and equipment, net of accumulated
 depreciation and amortization of $2,070 and $2,035
 at 6/30/07 and 12/31/06, respectively                                      229                 256
Deferred income taxes and other                                             301                 506
                                                               ----------------   -----------------
   Total assets                                                $         37,795   $          35,545
                                                               ================   =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                            $         11,754   $          11,960
   Retainage payable                                                      3,395               2,798
   Accrued payroll and benefits                                           1,106                 932
   Accrued expenses                                                         373                 296
   Billings in excess of costs and estimated
    earnings on uncompleted contracts                                     5,467               4,987
   Income taxes payable                                                     379               1,449
                                                               ----------------   -----------------
     Total current liabilities                                           22,474              22,422
                                                               ----------------   -----------------
Commitments and contingencies (Note 6)

Stockholders' equity (Note 3):
   Preferred stock, $.01 par value, 1,000,000 shares
    authorized, no shares issued and outstanding                              -                   -
   Common stock, $.01 par value, 25,000,000 shares
    authorized, 6,162,074 and 6,046,050 (1) shares issued
    and outstanding at 6/30/07 and 12/31/06, respectively                    62                  58
   Additional paid-in capital                                            13,485              10,890
   Retained earnings                                                      1,650               2,077
   Accumulated other comprehensive income:
      Net unrealized holding gains on available -
       for-sale securities                                                  124                  98
                                                               ----------------   -----------------
       Total stockholders' equity                                        15,321              13,123
                                                               ----------------   -----------------
   Total liabilities and stockholders' equity                  $         37,795   $          35,545
                                                               ================   =================
</TABLE>

(1)      The number of common shares issued and outstanding at 12/31/06 has been
         retroactively adjusted to reflect the 5% stock dividend declared on May
         8, 2007 to the stockholders of record on May 24, 2007 (Note 3).

          See accompanying notes to consolidated financial statements.

                                        3
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                 (in thousands, except share and per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                    Three Months          Three Months           Six Months            Six Months
                                 Ended June 30, 2007   Ended June 30, 2006   Ended June 30, 2007   Ended June 30, 2006
                                 -------------------   -------------------   -------------------   -------------------
<S>                              <C>                   <C>                   <C>                   <C>
Revenues                         $            19,320   $            20,132   $            37,311   $            35,893
Cost of revenues                              16,512                17,629                32,013                31,285
                                 -------------------   -------------------   -------------------   -------------------
  Gross profit                                 2,808                 2,503                 5,298                 4,608

Selling, general and
 administrative expenses                       1,477(1)              1,372(1)              2,814(2)              2,852(2)
                                 -------------------   -------------------   -------------------   -------------------
  Operating income                             1,331                 1,131                 2,484                 1,756

Other income :
Interest income, net                             121                    77                   234                   118
                                 -------------------   -------------------   -------------------   -------------------
  Income before provision
   for income taxes                            1,452                 1,208                 2,718                 1,874

Provision for income taxes                       681                   590                 1,224                   910
                                 -------------------   -------------------   -------------------   -------------------
Net income                       $               771   $               618   $             1,494   $               964
                                 ===================   ===================   ===================   ===================
Income per common share:
Basic                            $               .13   $               .10   $               .24   $               .16
Diluted                          $               .12   $               .10   $               .24   $               .16

Weighted average common shares
 outstanding (Note 5):
Basic                                      6,142,825             5,970,889             6,115,000             5,896,077
Diluted                                    6,254,400             6,109,971             6,226,425             6,027,873

Cash dividend declared and
 paid per common share           $                 -   $               .06   $                 -   $               .06
</TABLE>

(1)      During the three months ended June 30, 2007 and 2006, selling,  general
         and administrative expenses include stock compensation expenses of $168
         and $115,  respectively,  related to the exercise of stock  options and
         the effect of accounting standard SFAS 123-R.

(2)      During the six months  ended June 30, 2007 and 2006,  selling,  general
         and administrative expenses include stock compensation expenses of $506
         and $483,  respectively,  related to the exercise of stock  options and
         the effect of accounting standard SFAS 123-R.

          See accompanying notes to consolidated financial statements.

                                        4
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                    Three Months          Three Months           Six Months            Six Months
                                 Ended June 30, 2007   Ended June 30, 2006   Ended June 30, 2007   Ended June 30, 2006
                                 -------------------   -------------------   -------------------   -------------------
<S>                              <C>                   <C>                   <C>                   <C>
Net income                       $               771   $               618   $             1,494   $               964
                                 -------------------   -------------------   -------------------   -------------------
Other comprehensive income
 (loss) before tax:

Unrealized holding gains
 (losses) arising during
 the period                                       33                   (35)                   48                     -

Less: reclassification
 adjustment for gains included
 in net income                                     -                     -                     -                     -
                                 -------------------   -------------------   -------------------   -------------------
Other comprehensive income
 (loss) before income tax
 (expense) benefit                                33                   (35)                   48                     -

Income tax (expense) benefit
 related to items of other
 comprehensive income                            (15)                   16                   (22)                    -
                                 -------------------   -------------------   -------------------   -------------------
Other comprehensive income
 (loss) net of income
 tax (expense) benefit                            18                   (19)                   26                     -
                                 -------------------   -------------------   -------------------   -------------------
Total comprehensive income       $               789   $               599   $             1,520   $               964
                                 ===================   ===================   ===================   ===================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        5
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                         SIX MONTHS ENDED JUNE 30, 2007
                        (in thousands, except share data)

                                   ----------

<TABLE>
<CAPTION>
                                     Common Stock       Additional                       Accumulated Other
                                  -------------------    Paid-In                           Comprehensive
                                    Shares     Amount    Capital     Retained Earnings        Income            Total
                                  ----------   ------   ----------   -----------------   -----------------   ----------
<S>                                <C>         <C>      <C>          <C>                 <C>                 <C>
Balances, December 31, 2006,
 as previously reported            5,758,143   $   58   $   10,890   $           2,077   $              98   $   13,123

Retroactive restatement due to
 the effect of 5% stock dividend     287,907        -            -                   -                   -            -
                                  ----------   ------   ----------   -----------------   -----------------   ----------
Balance, December 31, 2006,
 as restated                       6,046,050       58       10,890               2,077                  98       13,123

Net income                                 -        -            -               1,494                   -        1,494

Exercise of stock options            110,666        1          671                   -                   -          672

Stock dividend                         5,358        3        1,918              (1,921)                  -            -

Stock based compensation                   -        -            6                   -                   -            6

Net unrealized gains on
 available-for sale securities             -        -            -                   -                  26           26
                                  ----------   ------   ----------   -----------------   -----------------   ----------
Balances, June 30, 2007            6,162,074   $   62   $   13,485   $           1,650   $             124   $   15,321
                                  ==========   ======   ==========   =================   =================   ==========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        6
<PAGE>

                            KSW, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                      Six Months             Six Months
                                                 Ended June 30, 2007    Ended June 30, 2006
                                                 --------------------   --------------------
<S>                                              <C>                    <C>
Cash flows from operating activities:
   Net income                                    $              1,494   $                964
Adjustments to reconcile net income to
   cash provided by operating activities:
   Depreciation and amortization                                   35                     31
   Deferred income taxes                                          186                    816
   Tax benefits from exercise of stock options                   (228)                  (223)
   Stock-based compensation expense
    related  to stock option plan                                 495                    483
Changes in operating assets and liabilities:
   Accounts receivable                                          1,241                    517
   Retainage receivable                                          (923)                (2,216)
   Costs and estimated earnings in excess
    of billings on uncompleted contracts                          626                   (707)
   Prepaid expenses and other receivables                        (244)                  (231)
   Accounts payable                                              (206)                 1,889
   Retainage payable                                              597                    779
   Accrued payroll and benefits                                   174                    487
   Accrued expenses                                                77                    336
   Billings in excess of costs and estimated
    earnings on uncompleted contracts                             480                  2,231
   Income taxes payable                                        (1,070)                     -
                                                 --------------------   --------------------
Net cash provided by operating
 activities (Note 4)                                            2,734                  5,156
                                                 --------------------   --------------------
Cash flows from investing activities:
   Purchases of property and equipment                             (8)                  (166)
   Purchases of marketable securities                               -                     (8)
                                                 --------------------   --------------------
Net cash used in investing activities                              (8)                  (174)
                                                 --------------------   --------------------
Cash flows from financing activities:
   Proceeds from exercise of stock options                        184                    395
   Tax benefits from exercise of stock options                    228                    223
   Cash dividends paid                                              -                   (341)
                                                 --------------------   --------------------
Net cash provided by financing activities
 (Note 4)                                                         412                    277
                                                 --------------------   --------------------

   Net increase  in cash                                        3,138                  5,259
Cash, beginning of period                                      14,085                  5,199
                                                 --------------------   --------------------
Cash, end of period                              $             17,223   $             10,458
                                                 ====================   ====================
Supplemental disclosure of cash flow
 information
Cash paid during the period for:
   Interest                                      $                  4   $                  5
   Income taxes                                  $              2,109   $                 93
</TABLE>

           See accompanying notes to consolidated financial statements

                                        7
<PAGE>

                            KSW, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1.       Nature of Operations and Basis of Presentation

The Company  furnishes and installs  heating,  ventilating and air  conditioning
systems and process piping systems for  institutional,  industrial,  commercial,
high-rise  residential and public works projects,  primarily in the State of New
York. The Company also serves as a mechanical trade manager,  performing project
management  services  relating to the mechanical  trades.  The Company considers
itself to be one operating segment.

The  unaudited  consolidated  financial  statements  presented  herein have been
prepared in accordance with the instructions to Form 10-Q and do not include all
of the  information  and note  disclosures  required  by  accounting  principles
generally  accepted  in  the  United  States  of  America.   These  consolidated
statements should be read in conjunction with the financial statements and notes
thereto  included in the  Company's  Form 10-K for the year ended  December  31,
2006.

In the opinion of management,  the accompanying unaudited consolidated financial
statements  include all  adjustments  necessary for a fair  presentation  of the
financial position of the Company as of June 30, 2007 and December 31, 2006, and
the results of its operations,  comprehensive income for the three and six month
periods  ended June 30,  2007 and 2006 and cash  flows for the six months  ended
June 30, 2007 and 2006. Because of the possible  fluctuations in the marketplace
in the construction  industry,  operating  results of the Company on a quarterly
basis may not be indicative of operating results for the full year.

All  references in the  accompanying  consolidated  financial  statements to the
number  of common  shares  and per share  amounts  are based on the  retroactive
effect of the stock dividend declared on May 8, 2007.

2.       Significant Accounting Policies

The significant  accounting  policies followed by the Company and its subsidiary
in preparing its consolidated  financial statements are set forth in Note (2) to
such consolidated  financial statements included in Form 10-K for the year ended
December 31, 2006. The Company has made no significant changes to these policies
during 2007.

The Company  adopted the  provisions  of Financial  Standards  Accounting  Board
Interpretation  No. 48 "Accounting  for Uncertainty in Income Taxes" ("FIN 48"),
an interpretation of FASB Statement No. 109 ("SFAS 109") on January 1, 2007. The
Company had no adjustment as a result of FIN 48.

                                        8
<PAGE>

3.       Stockholders' Equity

a.       Dividends

On May 8, 2007,  the Company's  Board of Directors  declared a 5% stock dividend
pursuant  to which  293,265  additional  shares  were issued on June 11, 2007 to
shareholders  of record  as of May 24,  2007.  Cash was paid in lieu of  issuing
fractional  shares based on the last sales price of the  Company's  stock on the
record date. The fair market value of the additional shares issued,  aggregating
$1,921,000,  was  charged to  retained  earnings.  Common  stock and  additional
paid-in  capital were  increased  by $3,000 and  $1,918,000,  respectively.  All
references in the accompanying  consolidated  financial statements to the number
of common  shares and per share amounts are based on the  retroactive  effect of
the stock dividend.

On May 8,  2006,  the  Company's  Board of  Directors  declared  a special  cash
dividend of $.06 per share.  The  aggregate  amount of the dividend was $341,000
and this dividend was paid on June 15, 2006 to  shareholders of record as of May
24, 2006.

b.       The 1995 Stock Option Plan

SFAS 123-R,  which requires the Company to expense the vesting of stock options,
lowered  net  income by  approximately  $1,000  and $4,000 for the three and six
months ended June 30, 2007, respectively.  In addition, during the quarter ended
June 30, 2007,  two Company  executives,  an employee  and a director  exercised
40,166  options  which  lowered net income by $90,000.  During the quarter ended
March 31, 2007,  an executive and a former  director  exercised  70,500  options
which lowered net income by $179,000.

The adoption of SFAS 123-R lowered net income by approximately $3,000 and $6,000
for the three and six  months  ended  June 30,  2006,  respectively.  During the
quarter ended June 30, 2006, an executive  and a director  exercised  options to
purchase  45,000 shares which lowered net income by $59,000.  During the quarter
ended March 31, 2006,  two executives and a former  director  exercised  195,000
options which lowered net income by 196,000.

As of June 30, 2007, there is approximately $7,000 of unrecognized  compensation
expense related to unvested share-based  compensation awards granted.  That cost
is expected to be recognized over the next 1.1 years.

The 1995 Stock Option Plan  contained a provision  entitling the option  holder,
after declaration of a stock dividend,  to receive, upon the future execution of
the option, the number of securities to which he would have been entitled had he
actually owned the shares which were subject to the  unexercised  portion of the
option.  Pursuant to the 5% stock dividend  declared on May 8, 2007, all holders
of unexercised  options became entitled to receive 5% additional  shares upon an
option exercise.  The weighted average number of shares  outstanding used in the
calculation of diluted  earnings per share as well

                                        9
<PAGE>

as the total number of shares  subject to options that are  outstanding  at June
30, 2007, have been adjusted to reflect this stock dividend.

The 1995 Stock Option Plan expired in December 2005.

Options were granted to certain  employees  and directors at prices equal to the
market  value of the stock on the dates the options  were  granted.  The options
granted generally had a term of 10 years from the grant date and granted options
vested  ratably  over a three year  period.  The fair  value of each  option was
amortized into compensation  expense on a straight-line  basis between the grant
date for the option and each vesting date. The Company  estimates the fair value
of all  stock  option  awards  as of the  date  of the  grant  by  applying  the
Black-Scholes  pricing  valuation model. The application of this valuation model
involves  assumptions that are judgmental and sensitive in the  determination of
compensation  expense which would include the expected  stock price  volatility,
risk-free interest rate,  weighted-average  expected life of the options and the
dividend yield.

Historical  information  is the primary  basis for the selection of the expected
volatility,  expected dividend yield and the expected lives of options. The risk
free interest rate was selected based upon yields of U.S. Treasury issues with a
term  equal to the  expected  life of the  option  being  valued.  Stock  option
activity for the six months ended June 30, 2007 was as follows:

<TABLE>
<CAPTION>
                                                                            Weighted Average
                                     Number           Weighted Average    Remaining Contractual       Aggregate
                                    of Shares          Exercise Price        Term in Years         Intrinsic Value
                                 ---------------    ------------------    ---------------------    ---------------
<S>                                     <C>         <C>                                     <C>    <C>
Outstanding at January 1, 2007           368,835    $             1.65
Expired/canceled                               -                     -
Granted                                        -                     -
Effect of stock dividend                  13,083                     -
Exercised                               (110,666)   $             1.66
                                 ---------------
Outstanding at June 30, 2007             271,252    $             1.64                      3.9    $     1,603,000
                                 ===============
Exercisable at June 30, 2007             257,252    $             1.64                      3.6    $     1,520,000
</TABLE>

Cash proceeds,  tax benefits and intrinsic  value related to total stock options
exercised  during the three and six months ended June 30, 2007 and 2006,  are as
follows:

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED   THREE MONTHS ENDED    SIX MONTHS ENDED     SIX MONTHS ENDED
                                    JUNE 30, 2007       JUNE 30, 2006        JUNE 30, 2007        JUNE 30, 2006
                                ------------------   -------------------   ------------------   ------------------
<S>                             <C>                  <C>                   <C>                  <C>
Proceeds from stock options
 exercised                      $           67,000   $            71,000   $          184,000   $        395,000

Tax benefits related to stock
 options exercised              $           76,000   $            56,000   $          228,000   $        223,000

Intrinsic value of stock
 options exercised              $          177,000   $           108,000   $          518,000   $        470,000
</TABLE>

                                       10
<PAGE>

c.       2007 Stock Option Plan

By  resolution  dated May 8, 2007,  the  Company's  Board of Directors  adopted,
subject to stockholder approval at the next annual meeting of stockholders,  the
KSW, Inc. 2007 Stock Option Plan.  Pursuant to the 2007 Plan,  300,000 shares of
common stock of the Company are reserved for issuance to employees,  consultants
and directors of the Company.  The primary purpose of the 2007 Plan is to reward
and retain key employees. To date, no options have been issued under the Plan.

4.       Restatement of Statements of Cash Flows

A correction has been made to the  consolidated  statement of cash flows for the
six months ended June 30, 2006,  which had presented the tax benefit of $223,000
related to the tax benefit  from the  exercise  of stock  options as a financing
outflow (a  bracketed  number)  rather  than a  financing  inflow of $223,000 (a
non-bracketed  number).  The tax benefit was properly  discussed in the M, D & A
section for the six months ended June 30, 2006,  and the cash balance at the end
of the period was properly  stated in the statement of cash flows.  There was no
effect  on the  consolidated  balance  sheet,  income  statement,  stockholders'
equity, or comprehensive income for the aforementioned quarter.

5.       Earnings per Share

<TABLE>
<CAPTION>
                                   THREE MONTHS ENDED    THREE MONTHS ENDED     SIX MONTHS ENDED      SIX MONTHS ENDED
                                      JUNE 30, 2007         JUNE 30, 2006         JUNE 30, 2007         JUNE 30, 2006
                                   -------------------   -------------------   -------------------   -------------------
<S>                                <C>                   <C>                   <C>                   <C>
Net income                         $           771,000   $           618,000   $         1,494,000   $           964,000
                                   ===================   ===================   ===================   ===================
Income Per Share - Basic
Weighted average shares
 outstanding during the period               6,142,825             5,970,889             6,115,000             5,896,077
                                   ===================   ===================   ===================   ===================
Income per common share -
Basic                              $               .13   $               .10   $               .24   $               .16
                                   ===================   ===================   ===================   ===================
Income  Per Share - Diluted
Weighted average shares
 outstanding during the period               6,142,825             5,970,889             6,115,000             5,896,077
Effect of stock options
 Dilution                                      111,575               139,082               111,425               131,796
                                   -------------------   -------------------   -------------------   -------------------
Total shares outstanding for
 purposes of calculating diluted
 earnings                                    6,254,400             6,109,971             6,226,425             6,027,873
                                   ===================   ===================   ===================   ===================
Income  per common and common
 equivalent share -Diluted         $               .12   $               .10   $               .24   $               .16
                                   ===================   ===================   ===================   ===================
</TABLE>

                                       11
<PAGE>

6.       Commitment and Contingencies

Proposals  and Claims.  During the  ordinary  and routine  course of its work on
construction projects, the Company may incur expenses for work outside the scope
of its contractual obligations, for which the owner or general contractor agrees
that the Company will be entitled to additional compensation, but where there is
not yet an agreement on price. The Company's  financial  statements  include the
amounts the  Company  believes it will  ultimately  receive on these  authorized
proposals.  Also  during the course of its work on  construction  projects,  the
Company  may  incur  expenses  for work  outside  the  scope of its  contractual
obligations,  for which no  acknowledgment of liability exists from the owner or
general  contractor for such  additional  work.  These claims may include change
proposals  for  extra  work  or  requests  for an  equitable  adjustment  to the
Company's  contract  price  due  to  unforeseen  disruptions  to  its  work.  In
accordance with accounting principles generally accepted in the United States of
America for the  construction  industry,  until written  acknowledgments  of the
validity  of the claims are  received,  the  claims  are not  recognized  in the
accompanying  consolidated  financial statements.  No accruals have been made in
the accompanying  consolidated  financial  statements related to these proposals
for which no  acknowledgment  of  liability  exists.  While the Company has been
generally  successful in obtaining a favorable  resolution of such claims, there
is no assurance that the Company will be successful in the future.

7.       Recently Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157).  SFAS 157  provides  guidance  for using fair value to measure  assets and
liabilities.  It also responds to investors'  requests for expanded  information
about the  extent to which  companies  measure  assets and  liabilities  at fair
value,  the information used to measure fair value, and the effect of fair value
measurements on earnings.  SFAS 157 applies whenever other standards require (or
permit) assets or liabilities to be measured at fair value,  and does not expand
the use of fair  value  in any new  circumstances.  SFAS  157 is  effective  for
financial  statements issued for fiscal years beginning after November 15, 2007.
The  adoption  of SFAS 157 is not  expected  to have a  material  impact  on the
Company's consolidated results of operations and financial condition.

In February  2007,  FASB issued  Statement  No. 159,  "The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - including  an amendment of FASB
Statement No. 115" ("SFAS No. 159").  SFAS No. 159 permits entities to choose to
measure many financial  instruments and certain other items at fair value.  SFAS
No. 159 is effective for financial  statements  beginning with the first quarter
of 2008. The adoption of SFAS No. 159 is not expected to have a material  impact
on the Company's consolidated results of operations and financial condition.

                                       12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

REVENUES

Total  revenues  for the quarter  ended June 30, 2007  decreased  by $812,000 or
(4.0)% to $19,320,000, as compared to $20,132,000 for the quarter ended June 30,
2006.  Total  revenues  for the six months  ended  June 30,  2007  increased  by
$1,418,000 or 4.0% to $37,311,000, as compared to $35,893,000 for the six months
ended June 30, 2006.  Revenue in the quarter ended June 30, 2007 would have been
higher,  but  several  new  projects  which were  expected to start in the first
quarter 2007 continued to experience delays in the second quarter 2007.

As of June 30, 2007, the Company had a backlog of approximately $90,000,000,  as
compared to approximately  $83,800,000 as of June 30, 2006. The Company believes
that approximately  $54,000,000 of the Company's backlog at June 30, 2007 is not
reasonably  expected to be completed within the year ended December 31, 2007. In
addition to the  $90,000,000  backlog as of June 30, 2007,  during the first two
weeks  of  July  2007,  the  Company  obtained  several  new  projects  totaling
approximately  $25,000,000.  A portion of that new work will be performed during
2007.  Also,  any other new  contracts  secured by the Company may also increase
2007 revenues.  The amount of backlog not reasonably expected to be completed in
the year ended December 31, 2007 is subject to various  uncertainties and risks.
See discussion under Forward Looking Statements, below.

COST OF REVENUES

Cost of revenues for the quarter ended June 30, 2007  decreased by $1,117,000 or
(6.3)% to $16,512,000, as compared to $17,629,000 for the quarter ended June 30,
2006.  Cost of  revenues  for the six months  ended June 30, 2007  increased  by
$728,000 or 2.3% to  $32,013,000,  as compared to $31,285,000 for the six months
ended June 30, 2006. The changes in cost of revenues corresponded to the changes
in revenues for the applicable periods.  Increased overall revenues have allowed
the Company to allocate the cost of project  supervision  and drafting  salaries
over multiple projects and more effectively  utilize its experienced field labor
personnel.

GROSS PROFIT

Gross  profit for the quarter  ended June 30, 2007 was  $2,808,000,  or 14.5% as
compared to  $2,503,000,  or 12.4% for the quarter  ended June 30,  2006.  Gross
profit  for the six months  ended June 30,  2007 was  $5,298,000,  or 14.2%,  as
compared to  $4,608,000,  or 12.8%,  for the six months ended June 30, 2006. The
increase in gross profit for the three and six months  ended June 30,  2007,  as
compared to the three and six months ended June 30, 2006, was primarily a result
of higher margins on current projects.

                                       13
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses ("SG&A") for the quarter ended June
30, 2007 increased by $105,000 or 7.7% to $1,477,000,  as compared to $1,372,000
for the quarter ended June 30, 2006. SG&A for the six months ended June 30, 2007
decreased by $38,000,  or (1.3)%,  to $2,814,000,  as compared to $2,852,000 for
the six months ended June 30, 2006.

A portion of the changes were a result of the exercise of stock options, as well
as expenses  related to the vesting of stock options which increased SG&A in the
three and six months ended June 30, 2007, by $53,000 and $23,000,  respectively,
as compared to the three and six months ended June 30, 2006.

Professional  fees related to the Company's  public  filings with the Securities
and Exchange  Commission,  together with American Stock Exchange fees, decreased
by  approximately  $120,000  and $80,000 for the three and six months ended June
30, 2007,  respectively,  as compared to the three and six months ended June 30,
2006.

The  remaining  changes in the  periods  were  primarily  a result of  increased
employment costs which were partially offset by the Company's ability to utilize
a portion of its office staff on trade management  contracts,  on which SG&A are
reimbursed as part of the Company's general condition costs.

OTHER INCOME

Other income for the quarter  ended June 30, 2007 was  $121,000,  as compared to
$77,000 for the quarter  ended June 30,  2006.  Other  income for the six months
ended June 30, 2007 was  $234,000,  as  compared to $118,000  for the six months
ended June 30, 2006.  These amounts were a result of interest  earned during the
periods.

PROVISION FOR TAXES

The tax provision for the quarter ended June 30, 2007 was $681,000,  as compared
to a tax  provision  of $590,000 for the quarter  ended June 30,  2006.  The tax
provision for the six months ended June 30, 2007 was $1,224,000,  as compared to
a tax provision of $910,000 for the six months ended June 30, 2006.

NET INCOME

As a result of all the items mentioned above, the Company reported net income of
$771,000,  or $.13 per share-basic and $.12 per  share-diluted,  for the quarter
ended June 30, 2007, as compared to reported net income of $618,000, or $.10 per
share-basic  and diluted,  for the quarter ended June 30, 2006.  Included in the
net  income  for  the  quarter   ended  June  30,  2007  were  net  expenses  of
approximately  $91,000,  related to the

                                       14
<PAGE>

exercising and vesting of stock options during the period.  Excluding the effect
of stock options,  net income would have been $862,000,  or $.14 per share-basic
and diluted for the quarter ended June 30, 2007.  Included in net income for the
quarter ended June 30, 2006 were net expenses of  approximately  $62,000 related
to the exercising and vesting of stock options during the period.  Excluding the
effect of stock  options,  net  income  would  have been  $680,000,  or $.11 per
share-basic and diluted for the quarter ended June 30, 2006.

For the six months  ended June 30,  2007,  the  Company  reported  net income of
$1,494,000,  or $.24 per  share-basic  and diluted,  as compared to reported net
income of  $964,000 or $.16 per  share-basic  and  diluted.  Included in the net
income for the six months ended June 30, 2007 were net expenses of approximately
$273,000,  related to the  exercising  and vesting of stock  options  during the
period.  Excluding  the  effect of stock  options  net  income  would  have been
$1,767,000 or $.29 per share-basic and $.28 per share-diluted for the six months
ended June 30, 2007.

Included  in the net  income for the six months  ended June 30,  2006,  were net
expenses of  approximately  $261,000  related to the  exercising  and vesting of
stock  options  during the period.  Excluding the effect of stock  options,  net
income  would  have  been  $1,225,000,  or $.21  per  share-basic  and  $.20 per
share-diluted for the six months ended June 30, 2006.

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

The Company's  principal capital requirement is to fund its work on construction
projects. Projects are billed monthly based on the work performed to date. These
project  billings,  less a withholding  of  retention,  which is received as the
project nears  completion,  are collectible  based on their respective  contract
terms.  The Company has historically  relied  primarily on internally  generated
funds and bank borrowings to finance its  operations.  The Company has a line of
credit  which is subject to certain  conditions.  The  Company has not relied on
bank borrowings to finance its operation since July 2003.

As of June 30,  2007,  total  cash  and  cash  equivalents  was  $17,223,000,  a
$6,765,000  increase  over the  $10,458,000  reported  as of June 30,  2006.  In
addition  at June 30,  2007,  the  Company  held  marketable  equity  securities
totaling $707,000.

CASH PROVIDED BY OPERATIONS

Net cash provided by operations was $2,734,000 for the six months ended June 30,
2007, as compared to $5,156,000 for the six months ended June 30, 2006 (see Note
4). The decrease in cash provided by operations in the six months ended June 30,
2007 as  compared to the prior  year,  was  primarily a result of the funding of
newer  projects as well as the payment of corporate  income taxes and  executive
bonuses.  In addition,  the net cash provided by  operations  for the six months
ended June 30, 2006  included the

                                       15
<PAGE>

collection of the second  installment  on the Co-Op City  litigation  settlement
(see "Item 7.  Management's  Discussion and Analysis of Financial  Condition and
Results of  Operations-Overview" in the Company's Annual Report on Form 10-K for
the year ended December 31, 2006 for further discussion).

CASH USED IN INVESTING ACTIVITIES

During the six months ended June 30, 2007,  cash used in investing  activity was
$8,000, related to purchases of property and equipment.

Net cash used in investing  activities was $174,000  during the six months ended
June 30, 2006. The Company purchased marketable  securities of $8,000 during the
six months ended June 30, 2006. In addition,  the Company purchased property and
equipment totaling $166,000 during the six months ended June 30, 2006.

CASH PROVIDED BY FINANCING ACTIVITIES

Net cash provided by financing  activities  during the six months ended June 30,
2007 and 2006 was $412,000 and $277,000, respectively.

During the six months ended June 30, 2007 two company executives, an employee, a
director  and a former  director  exercised  options to purchase an aggregate of
110,666 shares, contributing cash proceeds of $184,000 to the Company.

During the six months ended June 30, 2006, two company  executives,  a director,
and a former  director  exercised  options to purchase an  aggregate  of 240,000
shares, contributing cash proceeds of $395,000 to the Company.

SFAS 123-R  requires  cash  flows  resulting  from  excess  tax  benefits  to be
classified  as a part  of cash  flows  from  financing  activities.  Excess  tax
benefits  represent tax benefits  related to exercised  options in excess of the
associated  deferred  tax asset  for such  options.  As a result of SFAS  123-R,
$228,000  and  $223,000 of excess tax benefits for the six months ended June 30,
2007 and 2006,  respectively,  have been classified as an operating cash outflow
and a financing cash inflow (see Note 4).

CREDIT FACILITY

The Company has a line of credit  facility  from Bank of  America,  N.A.,  which
provides borrowings for working capital purposes up to $2,000,000. This facility
expires on March 31, 2008, is secured by the Company's assets, and is guaranteed
by the  Company's  subsidiary,  KSW  Mechanical  Services,  Inc.  There  were no
borrowings against this line of credit.

                                       16
<PAGE>

Advances  bear  interest,  based on the Company's  option,  at either the bank's
prime  lending  rate plus one percent per annum  (9.25% at June 30, 2007) or the
London Inter-Bank Offered Rate ("LIBOR") plus two and one-half percent per annum
(7.82% at June 30, 2007).

Payment may be  accelerated  by certain  events of default  such as  unfavorable
credit  factors,  the  occurrence of a material  adverse change in the Company's
business,  properties or financial condition,  a default in payment on the line,
impairment of security,  bankruptcy,  or the Company ceasing operations or being
unable to pay its debts.  The line of credit  must be paid in full at the end of
the term.

The Company currently has no significant capital expenditure commitments.

SURETY

On some of its projects,  the Company is required to provide a surety bond.  The
Company  obtains its surety bonds from Federal  Insurance  Company,  a member of
Chubb Group of Insurance Companies. The Company's ability to obtain bonding, and
the amount of bonding required, is solely at the discretion of the surety and is
primarily based upon the Company's net worth,  working  capital,  the number and
size  of  projects  under  construction  and  the  surety's   relationship  with
management.  The Company is  contingently  liable to the surety  under a general
indemnity agreement. The Company agrees to indemnify the surety for any payments
made on contracts of  suretyship,  guaranty or indemnity  that might result from
the Company not having the financial capacity to complete  projects.  Management
believes the likelihood of the surety having to complete projects is remote. The
contingent liability is the cost of completing all bonded projects,  which is an
undeterminable  amount  because  it is  subject  to  bidding  by third  parties.
Management  believes that all  contingent  liabilities  will be satisfied by the
Company's  performance on the specific  bonded  contracts  involved.  The surety
provides  bonding solely at its discretion,  and the arrangement with the surety
is an at-will arrangement subject to termination.

The Company's  bonding limits have been sufficient  given the volume and size of
the  Company's  contracts.  The  Company's  surety may require  that the Company
maintain  certain  tangible  net  worth  levels,   and  may  require  additional
guarantees if the Company should desire  increased  bonding limits.  At June 30,
2007,  approximately  $47,000,000  of the  Company's  backlog  of  approximately
$90,000,000 is anticipated to be bonded.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material  changes in the  accounting  policies and  estimates
that  the  Company  considers  to be  "critical"  from  those  disclosed  in the
Company's Annual Report on Form 10-K for the year-ended December 31, 2006.

                                       17
<PAGE>

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note (7) to the consolidated  financial statements for a summary of recently
issued accounting pronouncements impacting the Company.

FORWARD-LOOKING STATEMENTS

Certain  statements  contained  in this  report  are not  historical  facts  and
constitute "forward-looking  statements" (as such term is defined in the Private
Securities  Litigation  Reform Act of 1995).  These forward  looking  statements
generally can be identified as statements  that include words such as "believe",
"expect",  "anticipate",  "intend", "plan", "foresee", "likely", "will" or other
similar   words  or  phrases.   Such   forward-looking   statements   concerning
management's expectations, strategic objectives, business prospects, anticipated
economic performance and financial condition,  and other similar matters involve
known and unknown risks,  uncertainties  and other important  factors that could
cause the  actual  results,  performance  or  achievements  of results to differ
materially  from any future results,  performance or  achievements  discussed or
implied by such forward-looking statements. This document describes factors that
could  cause  actual  results  to differ  materially  from  expectations  of the
Company.  All written and oral  forward-looking  statements  attributable to the
Company  or  persons  acting on behalf of the  Company  are  qualified  in their
entirety by such factors. Such risks, uncertainties, and other important factors
include, among others:  inability to obtain bonding,  inability to retain senior
management, low labor productivity and shortages of skilled labor, a rise in the
price of steel  products,  economic  downturn,  reliance  on certain  customers,
competition,  inflation, the adverse effect of terrorist concerns and activities
on public budgets and insurance costs, the  unavailability  of private funds for
construction,  cancellations,  deferrals  or  modifications  of  our  customers'
projects,  and other  various  matters,  many of which are beyond the  Company's
control and other  factors as are  described  in "Item 1A. Risk  Factors" in the
Company's Form 10-K for the fiscal year ended December 31, 2006. Forward-looking
statements  speak  only as of the date of the  document  in which they are made.
Other than required by applicable  law, the Company  disclaims any obligation or
undertaking  to  provide  any  updates  or  revisions  to  any   forward-looking
statements to reflect any changes in the Company's  expectations  or any changes
in events,  conditions or circumstances on which the forward-looking  statements
are based.

ITEM 3.  QUANTITITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not utilize futures,  options or other derivative  instruments.
As of June 30, 2007, the Company has invested $707,000 in marketable securities.

ITEM 4.  CONTROLS AND PROCEDURES

The  Company  carried  out an  evaluation,  under the  supervision  and with the
participation  of management,  including our Chief  Executive  Officer and Chief
Financial  Officer,   of  the

                                       18
<PAGE>

effectiveness  of our  disclosure  controls and  procedures (as defined in Rules
13a-15(e)  and 15d-15(e)  under the Exchange Act) as of June 30, 2007.  Based on
that  evaluation,  our  Chief  Executive  Officer  and Chief  Financial  Officer
concluded that our disclosure  controls and procedures were effective as of June
30, 2007.

There  has been no change  in the  Company's  internal  control  over  financial
reporting (as defined in Rules  13a-15(f) and 15d-15(f)  under the Exchange Act)
during the Company's quarter ended June 30, 2007, that has materially  affected,
or is reasonably  likely to materially  affect,  the Company's  internal control
over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material  changes  related to risk  factors  from those items
previously disclosed in the December 31, 2006 Form 10-K.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company's  Annual  Meeting of  Stockholders  was held on May 8, 2007, in New
York, New York, for the purpose of (i) electing two Class III Directors to serve
until the annual meeting of stockholders in the year 2010 and (ii) ratifying the
appointment of Marden,  Harrison & Kreuter CPAs,  P.C., as independent  auditors
for the fiscal year ending  December  31,  2007.  Proxies  were  solicited  from
holders  of  5,803,643  outstanding  shares of  Common  Stock as of the close of
business on March 22, 2007, as described in the Company's  Proxy Statement dated
April 3, 2007.  Floyd  Warkol  and  Warren O.  Kogan  were  elected as Class III
Directors,  and the  appointment  of Marden,  Harrison & Kreuter CPAs,  P.C. was
ratified by the following votes:

                                       19
<PAGE>

(1)   To elect two Class III Directors to serve until the annual meeting of
      stockholders in the year 2010.

                              Votes For     Votes Witheld      Broker Non-votes
                              ---------     -------------      ----------------
     Floyd Warkol             5,217,087         82,126                 0
     Warren O. Kogan          5,282,614         16,599                 0

Stanley Kreitman, John Cavanagh and Innis O'Rourke, Jr. continue to serve as
directors of the Company after the Annual Meeting of Stockholders.

(2)   To ratify the appointment of Marden, Harrison & Kreuter CPAs, P.C. as the
      Company's independent auditors for the fiscal year ending December 31,
      2007.

         Votes For      Votes Against     Votes Abstained      Broker Non-votes
         ---------      -------------     ---------------      ----------------
         5,217,087          1,691              7,571                   0

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

      Exhibit 11 - Statement  regarding  Computation  of Earnings per Share (see
      Note 5 to the Consolidated Financial Statements included elsewhere in this
      Report)

      Exhibit 31.1 - Certification  of Chief Executive  Officer required by Rule
      13a-14(a)

      Exhibit 31.2 - Certification  of Chief Financial  Officer required by Rule
      13a-14(a)

      Exhibit 32.1 - Certification  of Chief Executive  Officer required by Rule
      13a-14(b) and 18 U.S.C. Section 1350

      Exhibit 32.2 - Certification  of Chief Financial  Officer required by Rule
      13a-14(b) and 18 U.S.C. Section 1350

                                       20
<PAGE>

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                                  KSW, INC.

Date:  August 7, 2007
                                                  /s/Richard W. Lucas
                                                  ------------------------------
                                                  Richard W. Lucas
                                                  Chief Financial Officer
                                                  (Principal Financial and
                                                  Accounting Officer and
                                                  Duly Authorized Officer)

                                       21
<PAGE>

                                    KSW, INC.

                                INDEX TO EXHIBITS

EXHIBIT NUMBER                            DESCRIPTION
--------------    --------------------------------------------------------------
     11           Statement  Regarding  Computation  of Earnings  per Share (see
                  Note  5 to  the  Consolidated  Financial  Statements  included
                  elsewhere in this Report)

    31.1          Certification  of Chief  Executive  Officer  required  by Rule
                  13a-14(a)

    31.2          Certification  of Chief  Financial  Officer  required  by Rule
                  13a-14(a)

    32.1          Certification  of Chief  Executive  Officer  required  by Rule
                  13a-14(b) and 18 U.S.C. Section 1350

    32.2          Certification  of Chief  Financial  Officer  required  by Rule
                  13a-14 (b) and 18 U.S.C. Section 1350

                                       22