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 September 30, 2010





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.
      Employerincorporation
      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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).Yes  ̈  No  ̈





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


Large
Accelerated Filer   ̈           Accelerated
Filer   ̈          Non-Accelerated
Filer   ̈    
Smaller Reporting Company 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
      atClass
                  November  11,
  2010Common
      stock, $.01 par value
                  6,366,625





KSW, INC.


QUARTERLY
REPORT ON FORM 10-Q


QUARTER ENDED SEPTEMBER 30,
2010





TABLE
OF CONTENTS




Page No.PART I
                            FINANCIAL INFORMATIONItem 1.
                            Financial StatementsConsolidated Balance Sheets –
                              September 30, 2010 (unaudited) and December 31,
      2009
                            3Consolidated Statements of Income –
                              Three and Nine months ended September 30, 2010 and 2009
      (unaudited)
                            4Consolidated Statements of Comprehensive Income
      –
                              Three and Nine months ended September 30, 2010 and 2009
      (unaudited)
                            5Consolidated Statement of Stockholders’ Equity
      –
                              Nine months ended September 30, 2010
      (unaudited)
                            6Consolidated Statements of Cash Flows–
                              Nine months ended September 30, 2010 and 2009
      (unaudited)
                            7Notes to Consolidated Financial
    Statements–
                            8Item 2.
                            Management's Discussion and Analysis of Financial Condition
      and Results of Operations
                            14Item 3.
                            Quantitative and Qualitative Disclosures  about
      Market Risk
                            20Item 4.
                            Controls and Procedures
                            20PART II
                            OTHER INFORMATIONItem 1.
                            Legal Proceedings
                            20Item 1A.
                            Risk Factors
                            20Item 2.
                            Unregistered Sales of Equity Securities and Use of
      Proceeds
                            21Item 3.
                            Defaults Upon Senior Securities
                            21Item 4.
                            [Removed and Reserved]
                            21Item 5.
                            Other Information
                            21Item 6.
                            Exhibits
                            21SIGNATURE
                            22INDEX TO EXHIBITS
                            23
  2
 Table of Contents





PART I – FINANCIAL INFORMATION





ITEM 1 – FINANCIAL
STATEMENTS


KSW, INC. AND SUBSIDIARY


CONSOLIDATED
BALANCE SHEETS


(in
thousands, except share data)





September 30, 2010
                        
                        
                        December 31, 2009(unaudited)
                        
                        
                        (as adjusted Note 4)ASSETSCurrent
      assets:Cash
      and cash equivalents
                        
                        $
                        15,509
                        
                        
                        $
                        13,738Marketable
      securities
                        
                        
                        1,628
                        
                        
                        
                        2,604Accounts
      receivable
                        
                        
                        17,613
                        
                        
                        
                        12,338Retainage
      receivable
                        
                        
                        5,970
                        
                        
                        
                        6,637Costs
      and estimated earnings in excess of billings on uncompleted
      contracts
                        
                        
                        2,299
                        
                        
                        
                        1,979Prepaid
      expenses and other receivables
                        
                        
                        216
                        
                        
                        
                        265Advances
      to and earnings from Joint Venture
                        
                        
                        194
                        
                        
                        
                        17Deferred
      income taxes
                        
                        
                        114
                        
                        
                        
                        141Total
      current assets
                        
                        
                        43,543
                        
                        
                        
                        37,719Property
      and equipment, net of accumulated depreciation and amortization of $2,397
      and $2,341 at 9/30/10 and 12/31/09, respectively
                        
                        
                        2,655
                        
                        
                        
                        2,692Deferred
      income taxes
                        
                        
                        85
                        
                        
                        
                        86Other
                        
                        
                        36
                        
                        
                        
                        40Total
      assets
                        
                        $
                        46,319
                        
                        
                        $
                        40,537LIABILITIES AND STOCKHOLDERS'
      EQUITYCurrent
      liabilities:Current
      portion of mortgage payable
                        
                        $
                        58
                        
                        
                        $
                        58Accounts
      payable
                        
                        
                        13,268
                        
                        
                        
                        12,005Retainage
      payable
                        
                        
                        3,283
                        
                        
                        
                        3,608Accrued
      payroll and benefits
                        
                        
                        1,325
                        
                        
                        
                        835Accrued
      expenses
                        
                        
                        347
                        
                        
                        
                        220Billings
      in excess of costs and estimated earnings on uncompleted
      contracts
                        
                        
                        4,611
                        
                        
                        
                        1,767Income
      taxes payable
                        
                        
                        370
                        
                        
                        
                        139Total
      current liabilities
                        
                        
                        23,262
                        
                        
                        
                        18,632Mortgage
      payable, net of current portion
                        
                        
                        1,009
                        
                        
                        
                        1,054Total
      liabilities
                        
                        
                        24,271
                        
                        
                        
                        19,686Commitments
      and contingencies (Note 8)Stockholders'
      equity: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; 6,398,325 and
      6,287,825 shares issued at 9/30/10 and 12/31/09, respectively; 6,345,625
      and 6,235,125 shares outstanding at 9/30/10 and 12/31/09,
      respectively
                        
                        
                        64
                        
                        
                        
                        63Additional
      paid-in capital
                        
                        
                        13,585
                        
                        
                        
                        13,313Retained
      earnings
                        
                        
                        8,680
                        
                        
                        
                        7,788Accumulated
      other comprehensive loss:Net
      unrealized holding losses on available - for-sale
    securities
                        
                        
                        (141
                        )
                        
                        
                        (173
                        )Less
      treasury stock at cost, 52,700 shares
                        
                        
                        (140
                        )
                        
                        
                        (140
                        )Total
      stockholders' equity
                        
                        
                        22,048
                        
                        
                        
                        20,851Total
      liabilities and stockholders' equity
                        
                        $
                        46,319
                        
                        
                        $
                        40,537





See
accompanying notes to consolidated financial statements.


3
 Table of Contents





KSW, INC. AND SUBSIDIARY





CONSOLIDATED
STATEMENTS OF INCOME


(in
thousands, except share and per share data)


(unaudited)





Three Months
                    Ended Sept. 30, 2010
                  
                  
                  Three Months
                    Ended Sept. 30, 2009
                  
                  
                  Nine Months
                    Ended Sept. 30, 2010
                  
                  
                  Nine Months
                    Ended Sept. 30, 2009Revenues
                  
                  $
                  21,118
                  
                  
                  $
                  13,181
                  
                  
                  $
                  59,017
                  
                  
                  $
                  49,508Cost
      of revenues
                  
                  
                  18,688
                  
                  
                  
                  11,439
                  
                  
                  
                  52,496
                  
                  
                  
                  44,389Gross
      profit
                  
                  
                  2,430
                  
                  
                  
                  1,742
                  
                  
                  
                  6,521
                  
                  
                  
                  5,119Selling,
      general and administrative expenses
                  
                  
                  1,184
                  
                  
                  
                  1,285
                  
                  
                  
                  3,825
                  
                  
                  
                  4,044Operating
      income
                  
                  
                  1,246
                  
                  
                  
                  457
                  
                  
                  
                  2,696
                  
                  
                  
                  1,075Other
      income:Foreign
      currency transaction
                  
                  
                  -
                  
                  
                  
                  19
                  
                  
                  
                  -
                  
                  
                  
                  19Interest
      income
                  
                  
                  23
                  
                  
                  
                  16
                  
                  
                  
                  81
                  
                  
                  
                  70Interest
      expense
                  
                  
                  (16
                  )
                  
                  
                  (17
                  )
                  
                  
                  (44
                  )
                  
                  
                  (51
                  )Total
      other income
                  
                  
                  7
                  
                  
                  
                  18
                  
                  
                  
                  37
                  
                  
                  
                  38Income
      before provision for income taxes
                  
                  
                  1,253
                  
                  
                  
                  475
                  
                  
                  
                  2,733
                  
                  
                  
                  1,113Provision
      for income taxes
                  
                  
                  541
                  
                  
                  
                  211
                  
                  
                  
                  1,213
                  
                  
                  
                  439Net
      income
                  
                  $
                  712
                  
                  
                  $
                  264
                  
                  
                  $
                  1,520
                  
                  
                  $
                  674Earnings
      per common share:Basic
                  
                  $
                  .11
                  
                  
                  $
                  .04
                  
                  
                  $
                  .24
                  
                  
                  $
                  .11Diluted
                  
                  $
                  .11
                  
                  
                  $
                  .04
                  
                  
                  $
                  .24
                  
                  
                  $
                  .11Weighted
      average common shares outstanding:Basic
                  
                  
                  6,338,060
                  
                  
                  
                  6,235,125
                  
                  
                  
                  6,289,285
                  
                  
                  
                  6,244,654Diluted
                  
                  
                  6,348,964
                  
                  
                  
                  6,277,115
                  
                  
                  
                  6,302,117
                  
                  
                  
                  6,285,260





See
accompanying notes to consolidated financial statements.


4
 Table of Contents





KSW, INC. AND SUBSIDIARY





CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME


(in
thousands)


(unaudited)





Three Months
                    Ended Sept, 30, 2010
                  
                  
                  Three Months
                    Ended Sept. 30, 2009
                  
                  
                  Nine Months
                    Ended Sept. 30, 2010
                  
                  
                  Nine Months
                    Ended Sept. 30, 2009Net
      income
                  
                  $
                  712
                  
                  
                  $
                  264
                  
                  
                  $
                  1,520
                  
                  
                  $
                  674Other
      comprehensive income before income tax :Unrealized
      holding gains arising during the period
                  
                  
                  111
                  
                  
                  
                  190
                  
                  
                  
                  58
                  
                  
                  
                  334Less:
      reclassification adjustment for gains included in net
    income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Other
      comprehensive income before income tax
                  
                  
                  111
                  
                  
                  
                  190
                  
                  
                  
                  58
                  
                  
                  
                  334Income
      tax related to items of other comprehensive income
                  
                  
                  50
                  
                  
                  
                  85
                  
                  
                  
                  26
                  
                  
                  
                  149Other
      comprehensive income, net of  income tax
                  
                  
                  61
                  
                  
                  
                  105
                  
                  
                  
                  32
                  
                  
                  
                  185Total
      comprehensive income
                  
                  $
                  773
                  
                  
                  $
                  369
                  
                  
                  $
                  1,552
                  
                  
                  $
                  859





See
accompanying notes to consolidated financial statements.


5
 Table of Contents





KSW, INC. AND SUBSIDIARY




CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY




NINE
MONTHS ENDED SEPTEMBER 30, 2010


(in thousands, except
share data)


(unaudited)




Common
      Stock
                  
                  
                  Additional
                    Paid-In
                  
                  
                  Retained
                  
                  
                  Accumulated
                    Other
                    Comprehensive
                  
                  
                  TreasuryShares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  Earnings
                  
                  
                  Loss
                  
                  
                  Stock
                  
                  
                  TotalBalances,
      January 1, 2010
                  
                  
                  6,287,825
                  
                  
                  $
                  63
                  
                  
                  $
                  13,313
                  
                  
                  $
                  7,788
                  
                  
                  $
                  (173
                  )
                  
                  $
                  (140
                  )
                  
                  $
                  20,851-Net
      income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  1,520
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,520Cash
      dividend - $.10 per share
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (628
                  )
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  (628
                  )Amortization
      of share-based compensation
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  15
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  15Employee
      stock options exercised
                  
                  
                  110,500
                  
                  
                  
                  1
                  
                  
                  
                  174
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  175Tax
      benefits from employee stock option plans
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  83
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  83Net
      unrealized gains on available-for-sale securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  32
                  
                  
                  
                  -
                  
                  
                  
                  32Balances,
      September 30, 2010
                  
                  
                  6,398,325
                  
                  
                  $
                  64
                  
                  
                  $
                  13,585
                  
                  
                  $
                  8,680
                  
                  
                  $
                  (141
                  )
                  
                  $
                  (140
                  )
                  
                  $
                  22,048





See
accompanying notes to consolidated financial statements.


6
 Table of Contents





KSW, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(in
thousands)


(unaudited)


Nine Months
                  Ended Sept. 30, 2010
                
                
                Nine Months
                  Ended Sept. 30, 2009Cash
      flows from operating activities:Net
      income
                
                $
                1,520
                
                
                $
                674Adjustments
      to reconcile net income to cash provided by (used in) operating
      activities:Depreciation
      and amortization
                
                
                128
                
                
                
                129Deferred
      income taxes
                
                
                3
                
                
                
                25Tax
      benefits from exercise of stock options
                
                
                (83
                )
                
                
                -Stock-based
      compensation expense related to stock option plan
                
                
                15
                
                
                
                14Earnings
      from joint venture
                
                
                (194
                )
                
                
                -Changes
      in operating assets and liabilities:Accounts
      receivable
                
                
                (5,275
                )
                
                
                5,059Retainage
      receivable
                
                
                667
                
                
                
                2,050Costs
      and estimated earnings in excess of billings on uncompleted
      contracts
                
                
                (320
                )
                
                
                (476
                )Prepaid
      income taxes
                
                
                -
                
                
                
                25Prepaid
      expenses and other receivables
                
                
                49
                
                
                
                (25
                )Accounts
      payable
                
                
                1,263
                
                
                
                (4,312
                )Retainage
      payable
                
                
                (325
                )
                
                
                (1,317
                )Accrued
      payroll and benefits
                
                
                490
                
                
                
                (504
                )Accrued
      expenses
                
                
                127
                
                
                
                33Billings
      in excess of costs and estimated earnings on uncompleted
      contracts
                
                
                2,844
                
                
                
                (1,685
                )Income
      taxes payable
                
                
                314
                
                
                
                -Net
      cash provided by (used in) operating activities
                
                
                1,223
                
                
                
                (310
                )Cash
      flows from investing activities:Purchases
      of property and equipment
                
                
                (88
                )
                
                
                (79
                )Proceeds
      from sale of marketable securities
                
                
                1,564
                
                
                
                -Purchases
      of marketable securities
                
                
                (530
                )
                
                
                (7
                )Repayment
      of advances by Joint Venture
                
                
                17
                
                
                
                -Net
      cash  provided by (used in) investing activities
                
                
                963
                
                
                
                (86
                )Cash
      flows from financing activities:Proceeds
      from employee stock options exercised
                
                
                175
                
                
                
                -Dividends
      paid
                
                
                (628
                )
                
                
                (624
                )Repayment
      of mortgage payable
                
                
                (45
                )
                
                
                (49
                )Purchase
      of treasury stock
                
                
                -
                
                
                
                (124
                )Tax
      benefits from employee stock options exercised
                
                
                83
                
                
                
                -Net
      cash used in financing activities
                
                
                (415
                )
                
                
                (797
                )Net
      increase (decrease) in cash and cash equivalents
                
                
                1,771
                
                
                
                (1,193
                )Cash
      and cash equivalents, beginning of period
                
                
                13,738
                
                
                
                16,611Cash
      and cash equivalents, end of period
                
                $
                15,509
                
                
                $
                15,418Supplemental
      disclosure of cash flow informationCash
      paid during the period for:Interest
                
                $
                44
                
                
                $
                51Income
      taxes
                
                $
                890
                
                
                $
                382





See
accompanying notes to consolidated financial statements.


7
 Table of Contents





KSW, INC. AND SUBSIDIARY





NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(unaudited)





1.
            Nature of Operations
      and Basis of Presentation





KSW, Inc.
and its subsidiary, KSW Mechanical Services, Inc., together 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.  On public works projects, the Company competes by submitting a
sealed bid to the public entity.  The project is typically awarded to
the lowest responsible bidder.  On private projects, the Company and
its competitors negotiate with the developer, or its construction manager, on
the cost of the mechanical work required. On
larger, more complicated projects such as hospitals, the Company serves as a
mechanical trade manager, performing project management services relating to the
mechanical trades.  The Company considers itself to operate as 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 disclosures required by accounting principles generally accepted
in the United States of America.  These consolidated statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2009.





In the
opinion of management, the accompanying unaudited consolidated financial
statements include all adjustments of normal recurring nature necessary for a
fair presentation of the consolidated financial position of the Company as of
September 30, 2010, and its results of operations and comprehensive income for
the three and nine month periods ended September 30, 2010 and 2009 and cash
flows for the nine month periods ended September 30, 2010 and
2009.  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 ending December 31,
2010.





2.
            Significant Accounting
      Policies





The
significant accounting policies followed by the Company in preparing its
consolidated financial statements are set forth in Note 2 to
the  consolidated financial statements included in the Company’s
Annual Report on Form 10-K for the year ended
December 31, 2009.  The Company has made no significant
changes to these policies during 2010.





The
Company follows accounting standards set by the Financial Accounting Standards
Board, commonly referred to as the “FASB.”  The FASB sets generally
accepted accounting principles (GAAP) that the Company follows to ensure its
consistent reporting of financial condition, results of operations, and cash
flows.


8
 Table of Contents





In June
2009, the FASB issued SFAS No. 166 “The Accounting for Transfers of Financial
Assets – an Amendment of FASB Statement 140”, currently included in FASB ASC
860, which clarifies circumstances under which a transferor has surrendered
control and, thus, should remove the asset together with any related liabilities
from its balance sheet.  It was effective for the Company on January
1, 2010.  The adoption of FASB ASC 860 did not have a material effect
on the Company’s consolidated financial statements and related
disclosures.





In June
2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46
(R)”, currently included in FASB ASC 810, which modifies the analysis required
to identify controlling financial interest in variable interest
entities.  It was effective for the Company on January 1,
2010.  The adoption of FASB ASC 810 did not have a material effect on
the Company’s consolidated financial statements and related
disclosures.





3.
            Fair Value of
      Financial Instruments





The
following disclosures of estimated fair value were determined by management,
using available market information and appropriate valuation
methodologies.  Considerable judgment is necessary to interpret market
data and develop estimated fair values.





Accordingly,
the estimates presented herein are not necessarily indicative of the amounts the
Company could realize on disposition of the financial
instruments.  The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.





Cash
equivalents, marketable securities, receivables, payables and other amounts
arising out of normal contract activities, including retentions, which may be
settled beyond one year, reasonably approximate their fair values.





The fair
value of the Company’s mortgage payable, which is not traded in the market, is
estimated by considering the Company’s credit rating, current rates available to
the Company for debt of the same remaining maturity and the terms of the
debt.





Disclosure
about fair value of financial instruments is based on pertinent information
available to management as of September 30, 2010.





4.
            Marketable
      Securities





FASB ASC
820-10, “Fair Value Measurements”, established a broad three level fair value
hierarchy that prioritizes observable and unobservable inputs which are used to
measure fair value.





The
Company values short-term investments, mutual funds and marketable equity
securities using market prices on active markets, which is Level 1 of the FASB
ASC 820-10 fair value hierarchy.  Level 1 instrument valuations are
obtained from real-time quotes for transactions in active exchange markets
involving identical assets.





Financial
assets carried at fair value at September 30, 2010 are classified in the table
below in one of three broad categories.


9
 Table of Contents





Level 1
                
                
                Level 2
                
                
                Level 3
                
                
                TotalMutual
      funds and marketable equity securities
                
                $
                1,628,000
                
                
                $
                -
                
                
                $
                -
                
                
                $
                1,628,000





For
presentation purposes, $1,045,000 of short-term investments in Canadian time
deposits, that were included in cash in the Company’s December 31, 2009
consolidated balance sheet, have been reclassed to marketable
securities.





5.
            Joint
      Venture





During
the third quarter of 2009, a joint venture in which the Company and Five Star
Electric Corporation each have a 50 percent ownership interest was awarded a $46
million contract for the construction of a chiller plant at the World Trade
Center site.





The work
covered by the joint venture is made up of three components, (1) a mechanical
segment performed by the Company, (2) an electrical segment performed by the
Company’s joint venture partner and (3) a general construction
segment.   The Joint Venture has issued three contracts, (1) to
the Company to perform the mechanical work, (2) to the Company’s partner to
perform the electrical work and (3) to a construction manager to perform the
general construction work as an agent for the joint venture, on a reimbursable
cost plus fee basis.





The
Company has provided a guaranteed maximum price for the mechanical segment of
the contract, and its joint venture partner has provided a guaranteed maximum
price for the electrical segment of the contract. The Company shares joint
venture profits/losses derived from the general construction segment equally
with its joint venture partner.





If the
other partner is unable to complete its contractual obligations, the Company
would be fully liable to do so under the joint venture’s contract with the Port
Authority of New York and New Jersey.  The Company and its partner are
also jointly and severally liable to the bonding company that issued the payment
and performance bond for the joint venture.  Circumstances that could
lead to a loss under the joint venture agreement beyond the Company’s stated
ownership interest include the other partner’s inability to contribute
additional funds to the venture in the event the project incurs a loss,
additional costs that the Company could incur should the partner fail to provide
the services and resources toward project completion that it committed to
provide in the joint venture agreement, and the partner’s failure to pay its
subcontractors and suppliers.





The
Company uses a combination of the proportionate consolidation method and the
equity method to account for its interest in the joint
venture.  TheCompany  records
the assets, liabilities, revenues and costs of revenues associated with the
mechanical segment of the contract as gross amounts, in the financial statements
(i.e. using the proportionate consolidation method), as it would any other
contract with a third party. The Company records its 50% share of the revenues
and costs of revenues associated with the general construction segment of the
contract as gross amounts in the consolidated statement of income and records
its portion of the assets and liabilities as a net amount in the consolidated
balance sheet (i.e. using the equity method), under the
caption  “Advances and Earnings of Joint Venture”. The joint venture
partner is responsible for the electrical


10
 Table of Contents





portion
of the contract, and the Company is not recognizing any portion of that part of
the joint venture contract in its financial statements.





In order
to ensure that the Company’s unconsolidated joint venture is properly
capitalized, the Company and its partner are currently billing the joint venture
only for the costs incurred on their respective portions of the joint venture
contract. The decision to bill the joint venture only for the costs incurred on
the project has not had a significant impact on the Company’s liquidity. As the
job progresses, the joint venture partners will bill the joint venture for their
profit, and these amounts will be disbursed.





Since the
Company is currently billing the joint venture for its costs related to the
performance of the mechanical portion of the joint venture contract, which do
not include any profit, this transaction increases amounts the Company records
in its consolidated balance sheets under the caption “Costs and estimated
earnings in excess of billings on uncompleted contracts”.





As of
September 30, 2010, the joint venture had cash totaling approximately
$3,501,000, no portion of which was included in the Company’s cash balance in
the consolidated balance sheet as of September 30, 2010.





At
September 30, 2010, the Company has recorded the following in its consolidated
balance sheets under the caption “Advances to and earnings from joint
venture”:





Advances
      to joint venture
                    
                    $
                    -Earnings
      from joint venture
                    
                    
                    194,000Balance
      at September 30, 2010
                    
                    $
                    194,000





6.
            Stockholders’
      Equity





(A)  Stock Option
Plans:





The
Company has outstanding stock options issued under two plans, the KSW, Inc. 1995
Stock Option Plan (“1995 plan”) and the KSW, Inc. 2007 Stock Option Plan (“2007
plan”).





The 1995
plan expired December 2005.  Therefore, no new options can be granted
under that plan.  At September 30, 2010, there were 35,001 outstanding
exercisable options, which were previously issued under the 1995 plan, expiring
on various dates through 2015.





The 2007
plan was adopted and approved by the Company’s Board of Directors on May 8, 2007
and was approved by the shareholders at the May 2008 Annual Meeting of
Stockholders.  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 and to compensate directors.  No
options have been issued to officers or employees under the 2007 plan. Under
this plan, the Company issued to a Company director options to purchase 20,000
shares of the Company’s common stock at an exercise price of $6.95 per share. On
May 7, 2009, the Company issued to a Company director options to
purchase


11
 Table of Contents





20,000
shares of the Company’s common stock at an exercise price of $2.61 per
share.  At September 30, 2010, there were 40,000 options outstanding
of which 26,666 were vested under the 2007 plan.





During
the three and nine months ended September 30, 2010, the Company incurred
compensation expense related to the vesting of stock options totaling
approximately $3,000
and $15,000, respectively.  During the three month ended September 30,
2010, an executive exercised an aggregate of 20,262 options.  During
the three months ended June 30, 2010, an executive exercised an aggregate of
82,238 options.  In addition, an executive and the estate of a former
director, exercised an aggregate of 8,000 options during the three months ended
March 31, 2010.





During
the three and nine months ended September 30, 2009, the Company incurred
compensation expense related to the vesting of stock options totaling
approximately $5,000 and $14,000, respectively.  There were no stock
options exercised during the three and nine months ended September 30,
2009.





As of
September 30, 2010, there was approximately $14,000 of unrecognized compensation
expense related to unvested stock-based compensation awards.  That
cost is expected to be recognized over the next 1.6 years.





Under
both plans, options were granted to certain employees, executives and directors
at prices equal to the market value of the stock on the dates the options were
issued.  The options granted generally have a term of 10 years from
the grant date and granted options vest ratably over a three year
period.  The fair value of each option is 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 nine months ended September 30, 2010 was as
follows:


Number
                          of Shares
                        
                        
                        Weighted Average
                          Exercise Price
                        
                        
                        Weighted Average
                          Remaining Contractual
                          Term in Years
                        
                        
                        Aggregate
                          IntrinsicValueOutstanding
      at January 1, 2010
                        
                        
                        185,501
                        
                        
                        $
                        2.27Expired/canceled
                        
                        
                        -
                        
                        
                        $
                        -Granted
                        
                        
                        -
                        
                        
                        $
                        -Exercised
                        
                        
                        (110,500
                        )
                        
                        $
                        1.58Outstanding
      at Sept. 30, 2010
                        
                        
                        75,001
                        
                        
                        $
                        3.29
                        
                        
                        
                        5.1
                        
                        
                        $
                        61,000Exercisable
      at Sept. 30, 2010
                        
                        
                        61,667
                        
                        
                        $
                        3.43
                        
                        
                        
                        4.3
                        
                        
                        $
                        55,000


12
 Table of Contents





Cash
proceeds, tax benefits and intrinsic value related to total stock options
exercised during the three and nine months ended September 30, 2010 and 2009 are
as follows:





Three MonthsEnded
                    Sept. 30, 2010
                  
                  
                  Three MonthsEnded
                    Sept. 30, 2009
                  
                  
                  Nine MonthsEnded
                    Sept. 30, 2010
                  
                  
                  Nine MonthsEnded
                    Sept, 30, 2010Proceeds
      from stock options exercised
                  
                  $
                  32,000
                  
                  
                  $
                  -
                  
                  
                  $
                  175,000
                  
                  
                  $
                  -Tax
      benefits related to stock options exercised
                  
                  $
                  12,000
                  
                  
                  $
                  -
                  
                  
                  $
                  83,000
                  
                  
                  $
                  -Intrinsic
      value of stock options exercised
                  
                  $
                  26,000
                  
                  
                  $
                  -
                  
                  
                  $
                  185,000
                  
                  
                  $
                  -





(B)           Dividend





On March
9, 2010, the Company’s Board of Directors declared a cash dividend of $.10 per
share.  The aggregate amount of the dividend was $628,000, and was
paid on May 24, 2010 to stockholders of record as of April 26,
2010.





On June
2, 2009, the Company’s Board of Directors declared a cash dividend of $.10 per
share.  The aggregate amount of the dividend was $624,000, and was
paid on July 17, 2009 to stockholders of record as of June 29,
2009.





(C)           Treasury
Stock





During
December 2008, the Company’s Board of Directors authorized the purchase, through
June 2009, of up to $1,000,000 of the Company’s common stock on the open
market.  As of September 30, 2010, the Company purchased 52,700 shares
of the Company’s common stock at a total cost of $140,000.





7.
            Earnings per
      Share





Three Months Ended
                              Sept. 30, 2010
                            
                            
                            Three Months Ended
                              Sept. 30, 2009
                            
                            
                            Nine Months Ended
                              Sept. 30, 2010
                            
                            
                            Nine Months Ended
                              Sept. 30, 2009Net
      income
                            
                            $
                            712,000
                            
                            
                            $
                            264,000
                            
                            
                            $
                            1,520,000
                            
                            
                            $
                            674,000Earnings per share –
      basic:Weighted
      average shares outstanding during the period
                            
                            
                            6,338,060
                            
                            
                            
                            6,235,125
                            
                            
                            
                            6,289,285
                            
                            
                            
                            6,244,654Earnings
      per share - basic
                            
                            $
                            .11
                            
                            
                            $
                            .04
                            
                            
                            $
                            .24
                            
                            
                            $
                            .11Earnings  per share –
      diluted:Weighted
      average shares outstanding during the period
                            
                            
                            6,338,060
                            
                            
                            
                            6,235,125
                            
                            
                            
                            6,289,285
                            
                            
                            
                            6,244,654Effect
      of stock option dilution
                            
                            
                            10,904
                            
                            
                            
                            41,990
                            
                            
                            
                            12,832
                            
                            
                            
                            40,606Total
      shares outstanding for purposes of calculating diluted earnings per
      share
                            
                            
                            6,348,964
                            
                            
                            
                            6,277,115
                            
                            
                            
                            6,302,117
                            
                            
                            
                            6,285,260Earnings
      per share – diluted
                            
                            $
                            .11
                            
                            
                            $
                            .04
                            
                            
                            $
                            .24
                            
                            
                            $
                            .11


13
 Table of Contents





8.
            Commitment and
      Contingencies





Proposals and
Claims.  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.





9.
            Recently Issued
      Accounting Pronouncements




There are
no recently issued accounting pronouncements which will affect the
Company.





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





Results of
Operations





Revenues





Total
revenues for the quarter ended September 30, 2010 increased by $7,937,000, or
60.2%, to $21,118,000, as compared to $13,181,000 for the quarter ended
September 30, 2009.  Total revenues for the nine months ended
September 30, 2010 increased by $9,509,000, or 19.2%, to $59,017,000, as
compared to $49,508,000 for the nine months ended September 30,
2009.





As of
September 30, 2010, the Company had backlog of approximately
$80,400,000.





The
Company has been recommended for the award of the mechanical work for the new
chiller plant serving the United Nations complex but the final contract value
has not yet been determined.  This project is not included in the
September 30, 2010 backlog.





Approximately
$63,000,000 of the September 30, 2010 backlog is not reasonably expected to be
completed within the year ending December 31, 2010.  The projects
included in the backlog above and any other new contracts secured during 2010
may also increase 2010 revenues.  The amount of backlog not reasonably
expected to be completed in the year ending December 31, 2010 is subject to
various uncertainties and risks.  The Company is actively seeking new
projects to add to its backlog.  The economic recession has impacted
the number of private projects during 2010 which the Company may
pursue.


14
 Table of Contents





Therefore,
the Company has begun aggressively pursuing opportunities in the public sector,
where the Company has been successful in the past.  During the 2009
third quarter, the Company received awards for chiller plants at the new World
Trade Center (awarded to the Company’s Joint Venture) and at the Brookhaven
National Laboratory.  These projects have been in the construction
phase during 2010.





Cost
of Revenues





Cost of
revenues for the quarter ended September 30, 2010 increased by $7,249,000, or
63.4%, to $18,688,000, as compared to $11,439,000 for the quarter ended
September 30, 2009.  Cost of revenues for the nine months ended
September 30, 2010 increased by $8,107,000, or 18.3%, to $52,496,000, as
compared to $44,389,000 for the nine months ended September 30,
2009.  The increase in cost of revenues for the quarter and nine
months ended September 30, 2010, as compared to the same periods in 2009, were
primarily associated with the increased revenues.





One
component of the cost of revenues is steel products such as pipe, valves and
fittings, which the Company typically installs on its projects.  The
Company purchases steel products from local, national and international
distributors.  The Company includes allowances in its estimates for
future escalations in steel prices due to market conditions. When market
conditions indicate a price rise, the Company enters into agreements locking in
prices with its suppliers to purchase steel products, at fixed dollar amounts
for extended time periods.  When steel product prices do not
fluctuate, the Company purchases these products on a price in effect
basis.





Gross
Profit





Gross
profit for the quarter ended September 30, 2010, was $2,430,000, or 11.5% of
revenues, as compared to gross profit of $1,742,000, or 13.2 % of revenues for
the quarter ended September 30, 2009.





Gross
profit for the nine months ended September 30, 2010 was $6,521,000, or 11.05% of
revenues, as compared to gross profit of $5,119,000, or 10.3% of revenues for
the nine months ended September 30, 2009.





The
increase in gross profit for the quarter and nine months ended September 30,
2010, as compared to the same periods in 2009, was primarily a result of
increased revenues.





Selling, General and Administrative
Expenses





Selling,
general and administrative expenses (“SG&A”) for the quarter ended September
30, 2010 decreased by $101,000, or (7.9)%, to $1,184,000, as compared to
$1,285,000 for the quarter ended September 30, 2009.  SG&A for the
nine months ended September 30, 2010 decreased by $219,000, or (5.4)%, to
$3,825,000, as compared to $4,044,000 for the nine months ended September 30,
2009.


15
 Table of Contents





The
decrease in SG&A during the quarter ended September 30, 2010, as compared to
the same period in 2009, was primarily related to the Company’s ability to
charge a portion of its overhead to trade management projects.  The
decrease in SG&A during the nine months ended September 30, 2010, as
compared to the same period in 2009, was primarily related to the Company’s
ability to charge a portion of its overhead to trade management projects as well
as a reduction in employment costs.





Other
Income





Other
income for the quarter ended September 30, 2010 was $7,000, as compared to
$18,000 for the quarter ended September 30, 2009.  Other income for
the nine months ended September 30, 2010 was $37,000, as compared to $38,000 for
the nine months ended September 30, 2009.  The changes in other income
for the quarter and nine months ended September 30, 2010, as compared to the
same periods in 2009, included an increase in the interest rates that
investments were able to earn, a reduction in interest expense and a gain in the
third quarter of 2009 from a foreign currency transaction.





Provision
for Income Taxes





The
provision for income taxes for the quarter ended September 30, 2010 was
$541,000, as compared to the provision for income taxes of $211,000 for the
quarter ended September 30, 2009.  The provision for income taxes for
the nine months ended September 30, 2010 was $1,213,000 as compared to a
provision for income taxes of $439,000 for the nine months ended September 30,
2009.





Net
Income





As a
result of the above mentioned items, the Company reported net income of
$712,000, or $.11 per share, basic and diluted, for the quarter ended September
30, 2010, as compared to reported net income of $264,000, or $.04 per share,
basic and diluted, for the quarter ended September 30, 2009.





For the
nine months ended September 30, 2010, the Company reported net income of
$1,520,000, or $.24 per share, basic and diluted, as compared to reported net
income of $674,000, or $.11 per share, basic and diluted, for the nine months
ended September 30, 2009.





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 operations since July 2003.


16
 Table of Contents





As of
September 30, 2010, total cash and cash equivalents was $15,509,000, a $91,000
increase from the $15,418,000 reported as of September 30, 2009.





Please
see Note 5, above, for a discussion of the Company’s joint venture.





Cash
provided by (used in) operations





Net cash
provided by operations was $1,223,000 for the nine months ended September 30,
2010. Net cash used in operations was $310,000 for the nine months ended
September 30, 2009.  Both periods were affected by the funding of
projects as well as the payment of corporate income taxes and executive bonuses,
but profits have more than offset these items during the nine months ended
September 30, 2010.





In order
to ensure that the Company’s unconsolidated joint venture is properly
capitalized, the Company and its partner are billing the joint venture only for
the costs incurred on their respective portions of the joint venture
contract.  The Company believes that this has not had a significant
impact on the Company’s liquidity.  As the job progresses, the joint
venture partners will bill the joint venture for their profits, and these
amounts will then be disbursed.





Cash
provided by (used in) investing activities





Net cash
provided by investing activities was $963,000 for the nine months ended
September 30, 2010.





Net cash
used in investing activities was $86,000 for the nine months ended September 30,
2009.





The
Company purchased property and equipment totaling $88,000 and $79,000 and
marketable securities totaling $530,000 and $7,000 during the nine months ended
September 30, 2010 and 2009, respectively.





During
the nine months ended September 30, 2010, the Company received proceeds from the
sale of marketable securities totaling $1,564,000.  In addition, the
Company’s unconsolidated joint venture has repaid advances totaling $17,000
during the nine months ended September 30, 2010.





Cash
used in financing activities





Net cash
used in financing activities was $415,000 for the nine months ended September
30, 2010, as compared to $797,000 for the nine months ended September 30,
2009.





On March
9, 2010, the Company’s Board of Directors declared a cash dividend of $.10 per
share.  The aggregate amount of the dividend was $628,000 and was paid
on May 24, 2010 to stockholders of record as of April 26, 2010.





On June
2, 2009, the Company’s Board of Directors declared a cash dividend of $.10
per


17
 Table of Contents





share.  The
aggregate amount of the dividend was $624,000 and was paid on July 17,
2009.





During
the nine months ended September 30, 2010, an executive and the estate of a
former director exercised options to purchasean aggregate of 110,500
shares contributing cash proceeds of $175,000 to the Company.





The
Company presents excess tax benefits resulting from the exercise of stock
options as part of cash flows from financing activities.  Excess tax
benefits represent tax benefits related to exercised options in excess of the
associated deferred tax assets for such options.  For the nine months
ended September 30, 2010, $83,000 of excess tax benefits have been classified as
an operating cash outflow and a financing cash inflow.





During
the nine months ended September 30, 2009, the Company purchased 46,100 shares of
treasury stock at a cost of $124,000.





In
addition, the Company repaid principal payments on its mortgage payable totaling
$45,000 and $49,000 during the nine months ended September 30, 2010 and 2009,
respectively.





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, 2011, is secured by the Company’s assets, and is
guaranteed by the Company’s subsidiary, KSW Mechanical Services,
Inc.  There have been no borrowings against this line of
credit.





Advances
bear interest, at the Company’s option, at either the bank’s prime lending
rate  (3.25 % at September 30, 2010) or the London Inter-Bank Offered
Rate (“LIBOR”) (.25 % at
September 30, 2010) plus two percent per annum.





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 of credit,
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.





Commitments





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


18
 Table of Contents





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
make any payments on the bonded 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
September 30, 2010, approximately $27,000,000 of the Company’s backlog of
$80,400,000 was bonded.  In addition, the Company and its joint
venture partner are jointly and severally liable to the bonding company that
issued the payment and performance bond for the joint venture.





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, 2009.





Recently Issued Accounting
Pronouncements





See Note
9 to the consolidated financial statements for a summary of recently issued
accounting pronouncements and their impact on 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


19
 Table of Contents





retain
senior management, low labor productivity and shortages of skilled labor, a rise
in the price of steel products, economic downturn, cancellation, suspension or
delay of projects by customers, 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, and other various matters, many of which are beyond the Company’s
control and other factors as are described in “ Part I, Item 1A.  Risk
Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2009.  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 other
than a completed interest rate swap on its mortgage payable with Bank of
America, N.A. Because the mortgage is a variable rate mortgage, the Company used
an interest rate swap to fix the interest rate that the Company pays at 5% over
the term of the mortgage.  In addition, as of September 30, 2010, the
Company has invested $1,628,000 in marketable securities.





ITEM 4.
            CONTROLS AND
      PROCEDURES





As of
September 30, 2010, our management, including our Chief Executive Officer and
our Chief Financial Officer, conducted an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act). Based on this assessment, management determined that,
as of September 30, 2010, the Company’s disclosure controls and procedures were
effective.





There
have been no changes 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 quarter ended September 30, 2010, that have materially affected or are
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 Company’s December 31, 2009 Annual Report on Form
10-K.


20
 Table of Contents





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





None.





ITEM 3.
            DEFAULTS UPON SENIOR
      SECURITIES





None.





ITEM 4.
            [REMOVED
      AND RESERVED]





ITEM 5.
            OTHER
      INFORMATION





None





ITEM 6.
            EXHIBITS





Exhibit
11 – Statement regarding Computation of Earnings per Share (see Note 7 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


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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:  November
      11, 2010/s/Richard W. LucasRichard
      W. LucasChief
      Financial Officer(Principal
      Financial and Accounting Officerand
      Duly Authorized Officer)


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 Table of Contents





KSW, INC.





INDEX
TO EXHIBITS





Exhibit Number
                
                Description11
                
                Statement
      Regarding Computation of Earnings per Share (see Note 7 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. §135032.2
                
                Certification
      of Chief Financial Officer required by Rule 13a-14 (b) and 18 U.S.C.
      §1350


23