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We are very pleased with the addition of Walker Engineering. Walker added approximately $93 million of revenue this quarter and $216 million of backlog. As expected, they did not contribute any net earnings per share due to amortization and purchase adjustments. I will discuss our backlog and outlook in more detail in a few minutes.

But before I get into that, let me turn this call over to Bill to review the details of our financial performance. Bill?

William George -- Executive Vice President and Chief Financial Officer

Thanks, Brian. So please refer to Slides two through six as I provide some explanations and details of our financial results. Second quarter revenue was $650 million, an increase of $115 million or 22% compared to the second quarter of 2018. This increase is due to the current quarter acquisition of Walker Engineering that Brian mentioned and of a company in Indiana that we acquired at the beginning of the third quarter in 2018. Revenue was essentially flat on a same-store basis for the quarter, and revenue was up 4% on a same-store basis for the first 6 months.

We had a solid second quarter, but unfortunately, we fell short of the extraordinary results of the same period in 2018. Net income for the second quarter of 2019 was $24 million or $0.65 per share, which is lower than the same quarter last year when we earned $33 million or $0.87 per share. Of the $0.87 of earnings per share that we reported in the prior year, $0.08 reflected a gain from a legal settlement. Without that, we earned $0.79 in the prior year. During the second quarters of 2018, we experienced performance at certain of our larger subsidiaries that is extremely hard for them to duplicate. For example, our large subsidiary at North Carolina had a fantastic second quarter this year.

This year, they earned over $6 million and over 12% operating income. However, in 2018, they earned even more. This was true at other locations, including for our very strong operating locations in Wisconsin and Virginia. We believe that our underlying performance and trends are strong. However, we could not match our performance in the second quarter of 2018, and we face a similar tough comparable in the present quarter, 3Q 2019. Gross profit was $120 million for the second quarter of 2019, an increase of $9 million or 7.9% compared to the second quarter of 2018.

Gross profit as a percentage of revenue was 18.5% in the second quarter of 2019 compared to 20.8% for the second quarter of 2018. Walker's lower average gross margins, together with purchase-related adjustments were, by far, the largest element of the decline in our gross margin percentage, together accounting for 1.5% of the change. So without Walker, our margins would have been similar to but somewhat lower than last year. SG&A expense was $85 million for the second quarter of 2019 compared to $71 million for the second quarter of 2018. The increase was due to acquisitions, including additional amortization expense for those acquisitions, and also reflects investments in people due to the growth we have experienced in recent years. SG&A as a percentage of revenue decreased from 13.3% in the second quarter of 2018 to 13% even for the second quarter of 2019. Income tax expense was $7 million with an effective tax rate of 22.3% as compared to tax expense of $11 million and an effective tax rate of 24.9% for the second quarter of 2018.

This quarter, we benefited from discrete items. We had good free cash flow trends during the quarter. For the quarter, our free cash flow was $19 million, and that compares to $25 million a year ago. Our 6 months free cash flow is $12 million, which compares to $24 million for the first 6 months of 2018. Although we are somewhat behind our pace in 2018 as we really worked to catch up from the extraordinary cash flow that we achieved in the fourth quarter of 2018, we remain confident. We're especially encouraged about our cash flow prospects for the rest of the year because of our strong working capital, which has increased by more than $50 million since the beginning of the year and which should provide a solid foundation for free cash flow after we work our way through the busy summer.

As we have previously discussed, we suffered a cyber attack in April of this year. However, we are fully back online. The direct out-of-the-pocket cost of that event, net of insurance, negatively impacted our operating results this quarter by approximately $0.01 to $0.02. While the incident did not adversely impact the work that we performed for our customers, this event did cause extra efforts and distraction to many of our employees during April, and the financial impacts of these inefficiencies is not quantifiable. As Brian mentioned earlier, we closed the Walker Engineering acquisition on April 1 of this quarter, and we expect that they will contribute annual revenues of $325 million to $375 million on an ongoing future basis.

Walker contributed EBITDA and cash flow this quarter. However, as expected, they were not accretive this quarter, and we continue to expect they will not be materially accretive for the first 18 to 24 months due to amortization expense and other purchase-related adjustments. While our second quarter pre-tax income declined compared to 2018, EBITDA held up, thanks to the contribution from our new team members at Walker. During 2019, we had purchased 161,000 of our shares at an average price of $49.09. And since we began our stock repurchase program in 2007, we have bought back 8.4 million shares at an average price of $16.87.

That's all I have on financials, Brian.

Brian E. Lane -- Chief Executive Officer, President and Director

Okay. Thank you, Bill. I'm going to spend a few minutes discussing our backlog and activity in various sectors and markets. These are covered on Slides seven through nine. I will then comment on our prospects for the rest of this year. Our backlog increased significantly this quarter. Backlog at the end of the second quarter of 2019 was $1.5 billion, an increase of $353 million compared to the first quarter of 2019. Excluding the Walker acquisition, our same-store sequential backlog increased $137 million or 12%. This is one of the largest same-store sequential increases that we have ever reported.

Our year-over-year same-store backlog is also up by $34 million or 3%. In addition to strong backlog improvement, we have remarkable balance across our various end-use sectors. Institutional markets, which include government, healthcare and education, made up 36% of our revenue for 2019. The commercial sector was 33% of our revenue, and industrial represented the remaining 31%. Please turn to Slide nine for our current revenue mix. For 2019, construction is 76% of our total revenue, with 44% from construction projects for new buildings and 32% from construction projects in existing buildings.

Our construction business is benefiting from good fundamentals and trends in the nonresidential construction market. We are booking good projects, including many for next year. Geographically, we have experienced strong results in most of our markets with particular strength in North Carolina, Florida, Virginia and Wisconsin. We continue to make investments in our service business. Service is 24% of our revenue, with service projects providing 9% of our revenue and pure service, including hourly work, providing 15% of revenue. Although service is a lower percentage of our total volume as a result of our acquisitions, our service business is doing well and it's -- on an absolute basis, service was higher than the second quarter of 2018 in volume and in profits.

Finally, our outlook. Our backlog and pricing environments are strong, and our ongoing prospects are good. We expect mid-single-digit revenue growth during the second half of 2019 on a same-store basis. While we believe that 2019 will be another strong year for Comfort Systems, we do not expect to earn as much in the third quarter of 2019 as we did in the same period last year. Our fourth quarter comparable is also tough but not to the level of the second and third. So we are optimistic that our fourth quarter earnings will be in the same range as last year. Overall, we like the trends we see in our backlog. We feel that our markets are positive, and. We believe that gives us a good opportunity for improved results in 2020. Thank you, once again, to our 11,800 employees for your hard work and dedication.

I will now turn it back over to Sheila for questions. Thank you.

Questions and Answers:

Operator

[Operator Instructions] And the first question comes from the line of Brent Thielman of D.A. Davidson. Please go ahead.

Brent Thielman -- D.A. Davidson -- Analyst

Thanks. Good morning. Brian, just curious, the erratic weather across the country, I guess, particularly in the Midwest and Texas, did that have any impact in any meaningful way for you in the quarter?

Brian E. Lane -- Chief Executive Officer, President and Director

I don't think it was meaningful. We always have weather every year. Someplace, it helps. Someplace, it hurts. But I think in the aggregate, it's relatively neutral.

Brent Thielman -- D.A. Davidson -- Analyst

Okay. And you guys break out the growth by the various customer types, and I know it can kind of swing around in any given quarter just based on what you're working on, but those sectors that are, call it, 10% or more sales, did any of those stand out where even if it's not in backlog, you feel like you've got a really kind of solid 18 months plus view of new business coming?

Brian E. Lane -- Chief Executive Officer, President and Director

Yes. It's Brian again, Brent. I'm really optimistic about the industrial sector for us, including our traditional business and Walker. It's -- backlog is good, and the prospects are good if you want to pick one that's particularly strong. Also education is very good, and healthcare is improving.

William George -- Executive Vice President and Chief Financial Officer

Yes. I would agree with all of that. There's good trends in some type of the investor we do like pharma and certain kinds of...

Brian E. Lane -- Chief Executive Officer, President and Director

And data centers are still strong.

Brent Thielman -- D.A. Davidson -- Analyst

Okay. Last one if I could. The service maintenance piece looks like it's continuing to grow really well. It looks like around 7% year-to-date. I don't think that's an RPO. But is that kind of a practical growth rate we can think about for that aspect of the business going forward?

Brian E. Lane -- Chief Executive Officer, President and Director

Yes. I think on average, it is. We're still fully committed to service. We love the service business. We've been investing in it for 7 or 8 years now. We've got a really good team doing it. So I think that's a good average number to use.

Brent Thielman -- D.A. Davidson -- Analyst

Okay great. Thank you.

Brian E. Lane -- Chief Executive Officer, President and Director

Thank you.

Operator

Thank you. And the next question comes from the line of Adam Thalhimer from Thompson Davis. Please go ahead.

Adam Thalhimer -- Thompson Davis -- Analyst

The -- so EPS declined $0.14 year-over-year in Q2. Is that roughly how you see Q3 shaping up?

William George -- Executive Vice President and Chief Financial Officer

Yes. So Adam, so as Brian talked about earlier, our operations, they're going to -- they're strong. They're going to be strong in the third quarter, really extremely strong by historical standards, but they just won't be as strong as last year. And like you said, different people sort of put different things back and took them out a year ago. But if you look at our second quarter 2019 earnings, we were about $0.15 to $0.20 lower than the year before. And I would say that our best estimate today is that the third quarter of this year will be lower than the prior year by about that same amount. There's a big range of what can happen around that. But if you were to make us pick sort of what the trend seems like, I'd say same -- similar difference for 3Q '19 to '18 as there was 2Q '19 to '18.

Adam Thalhimer -- Thompson Davis -- Analyst

Okay. And what's your view? So organic revenue decelerated in Q2, right? It was plus 10% in Q1. It was minus 1% in Q2. What drove that?

William George -- Executive Vice President and Chief Financial Officer

Well, it's the same thing. Last year, we just -- just in the same way that last year, we had extraordinary earnings. Those earnings came from revenue. So we had companies -- like one of our biggest companies was revenue-ing in the 20s. Last year, their revenue -- per month. They're revenue-ing in the 19s -- in the high-teens this year. They had a higher OI percentage this year, which cover a little bit of that. But we just -- the same way we had high earnings last year in the second and third quarter, we had high revenues. Having said that, the backlog's up. So we do feel pretty good about that mid-single digits.

Through 6 months, we're up over 4%, and the third quarter will probably be -- will probably struggle to make much improvement on the revenue we got last year. And in the fourth quarter, we probably have a good opportunity to have a little higher revenue, which I think, overall, bakes out to that mid-single digits, maybe shadings down a little from the 5, but somewhere in that mid-single-digit range, just like we are for the first 6 months.

Brian E. Lane -- Chief Executive Officer, President and Director

So I just want to add on one thing. We're extremely busy right now. In our results, we do not have problem work. Our gross profit is still very strong. So we're still executing the work well.

Adam Thalhimer -- Thompson Davis -- Analyst

And maybe you can give us a flavor for July. I mean, have you seen some reacceleration in July?

William George -- Executive Vice President and Chief Financial Officer

I don't think I -- also, haven't seen our July numbers come in. I know some jobs that'll be starting, but they're probably not starting in July at certain locations, so.

Adam Thalhimer -- Thompson Davis -- Analyst

All right. Last one, and then I'll hop back in. But how long do you think it'll take you to get to Walker margins kind of more similar to HVAC?

William George -- Executive Vice President and Chief Financial Officer

That's an interesting question because they have a different mix, so they're never going to get to the point where they have an averaging in of the service margins. But as far as their construction margins, I don't know. We think that there's room for their margins to improve on a sort of over the business cycle basis, but it's very hard to just sit here and predict when and where they'll get to. We think this is great company. It makes a lot of money. There are different mixes in electrical and stuff that I don't know that it ever gets to be exactly the same. And, by the way, they'll be quarter someday, in the future where they're higher, right, because it's also lumpy, all right?

Brian E. Lane -- Chief Executive Officer, President and Director

The good news about them is they do very good work.

Operator

And the next question comes from the line of Joe Mondillo from Sidoti. please go ahead.

Joe Mondillo -- Sidoti -- Analyst

I'm sorry. Can you hear me?

Brian E. Lane -- Chief Executive Officer, President and Director

Yes. We hear you, Joe.

Joe Mondillo -- Sidoti -- Analyst

Hey you guys. How are you doing

Brian E. Lane -- Chief Executive Officer, President and Director

Good to see you. Doing well.

Joe Mondillo -- Sidoti -- Analyst

Sorry about that. So the biggest -- I'm sorry. I'm sorry. Sorry about that. So the first question that I have, I'm sorry if you already asked it -- or if it was already asked, was regarding the gross margins at the Walker business. It probably was addressed, but it looks like the core business or the business was pretty good, and so that sort of brings me to Walker. And I'm just trying to get a sense of whether these gross margins that you're seeing at Walker, first off, are going to be consistent going forward? Or if you should be able to see some improvement?

William George -- Executive Vice President and Chief Financial Officer

So I would say that the gross margins that they reported in the second quarter at the field operating level are going to be the same, are my best guess of what they'll continue to do in the future. They did well. I think that -- in the next several quarters, right? Their trends could develop past that. There is a little bit in that -- not a little bit. Actually, there's a noticeable amount in that, that's purchase adjustments that also pulled it down. So the effect of Walker being in our numbers lowered our gross margin by 1.5% in total. A little more than 1% of that was simple, straight averaging down, simple math. A little less than 0.5% was various purchase adjustments. And then if you look at Comfort, if you eliminate -- if you look at gross margin without Walker in the math, it was really roughly 20%. So down because we're down from last year [Technical Issues] but not hugely down. But this is a first quarter with a big new acquisition. We'll have to watch how trends develop. We're learning about them, and they're learning about us, but that's my best -- that's the best answer I can give you right now to that question.

Joe Mondillo -- Sidoti -- Analyst

And so a couple of follow-ups. Number one, is there any sort of centralized cost that you can help sort of improve the overall margins at Walker? And then number two, in terms of the purchase accounting noncash amortization, how does that sort of -- I mean, does that sort of flat line for the next several quarters? And then maybe by the second half of fiscal '20 or calendar '20, does that start to trend down? Or just give me a sense of that as well.

William George -- Executive Vice President and Chief Financial Officer

So the answer to the first question is no. We don't really do these acquisitions counting on like cost synergies from changes that we're going to make in an organization. That's a great company. It's very self-contained. We want them to keep doing what they're going to do. We may have a few opportunities to save a little bit money on some insurance or something. But that's probably going to be offset by something we make them do because we're pretty demanding on the financial line or something. So we do not -- we believe that there is revenue and improvement synergy over many years after we buy companies.

We think we've actually maybe proven that. But no to the first question. Second question, amortization. If you look at our amortization, our amortization is 3-point -- slightly over $3 million higher in the second quarter than it was in the first quarter. That's a combination of, we still have the last 3 months of noncomparable billing or the Indiana acquisition, but most of that is Walker. Walker's amortization will stay high, especially for the rest of this year. Slight relief for next year. It's mainly -- that first 18 to 24 months that -- the fact that GAAP requires us to go sort of value what we paid and expense it, hides those earnings.

They still show up in EBITDA. We still get cash flow. And it's just unfortunate that we're not allowed to show what Comfort is actually making, right? The money we pay for them is out the door. If you're a shareholder of Comfort, you own today what we are today. But as you guys know, for all these acquisitions we've done over the last 5 years, we have little amounts of money that run through that amortization line and sort of to say yes, you bought the company, but that -- in some way, that's a simple cost of goods sold ordinary net income cost to you, and it's -- but it's no different for us than for anybody else. So essentially, $3 million, $3.2 million plus purchase adjustments takeout, they're roughly neutral. And if there's not much, they'll do much more. It's any different than that for the rest of this year. But we'll continue to get the real earnings, and we'll continue to get the cash flow. And that's really how -- the basis on which we make that investment.

Joe Mondillo -- Sidoti -- Analyst

Okay. And then just last follow-up regarding Walker. Number one, was it accretive or dilutive in the second quarter? And number two, looking at cash flow, and I guess this is just a broad question maybe. But if it was at all dilutive or slightly accretive to EPS, I would have thought cash flow would have been better, and cash flow was actually, I think, a little weaker than from a year ago. So with all that noncash related to the deal, I would have thought it would have been maybe better. But could you address that as well?

William George -- Executive Vice President and Chief Financial Officer

Yes. So there's different ways to look at that accretiveness, but I think the fairest way to look at it is they were $0.01 or $0.02 dilutive. If you just sort of said, OK, I'm just going to look at what -- but, by the way, if you look at any of these companies we bought, they're all $0.01 or $0.02-plus or $0.01 or $0.02-minus. They're really roughly neutral. As far as cash flow goes, we had -- the fourth quarter of last year, we had over $75 million of cash flow, and we just knew for the next couple of quarters, you can't collect that money twice, right? We collected $2 a share in the fourth quarter of last year, and so we're pretty happy with our cash flow. We're positive. We're only down $10 million from last year, which on a $2.5 billion company, is not a lot, right? So we're -- and we -- as we mentioned earlier, our working capital is up by over $50 million since January 1. So once we get past the busy summer, we feel fine about -- we like our chances.

Brian E. Lane -- Chief Executive Officer, President and Director

Cash flow will be fine.

William George -- Executive Vice President and Chief Financial Officer

Cash flow will be fine. We'll bring down our debt some just as we expected. We feel good about it.

Joe Mondillo -- Sidoti -- Analyst

And do you anticipate a pretty good jump in free cash flow in the back half of the year, especially with Walker?

William George -- Executive Vice President and Chief Financial Officer

So let me answer that carefully. Absolutely, compared to the first half of the year, last year's back half free cash flow was a monster. If we come anywhere close to that, we'll be knocking it out of the park.

Joe Mondillo -- Sidoti -- Analyst

Okay. And last question for me just in terms of service versus -- so it seems like new construction -- actually, first off, with Walker, it sort of skews all these numbers. So if you take sort of -- if you take out Walker, how does sort of the mix on a mix basis service versus new construction look like? I would guess maybe service was little light. But just wondering about that, especially how that affects sort of gross margins.

William George -- Executive Vice President and Chief Financial Officer

So service, over the last few -- over the couple last years of the recession, was above 30%, right, of our total revenue. It's roughly 30%. When construction picked back up long before we bought Walker and independent of any of the acquisitions we did, it had trended down into the mid-20s. And that's not -- it grew on an absolute basis every single year, for sure. I think maybe even every single quarter.

Brian E. Lane -- Chief Executive Officer, President and Director

It did.

William George -- Executive Vice President and Chief Financial Officer

So it is not the case. Service is doing fine. It's just that construction got -- construction was nowhere. And suddenly, we're building way more buildings in the United States, and Comfort's making a lot more money helping build those. So construction is -- it changed by more. And as far as the quarter goes, revenue and profit was up on a same-store absolute basis by sort of the usual amount. It continues to improve. We hope to improve it even more. We're constantly focusing on it. I would say our focus right now is on maintenance agreement renewal and on margin. We have good leadership in that area, and service is a great part of our story. And when it's going to matter again is someday, recession's coming back.

Brian E. Lane -- Chief Executive Officer, President and Director

And we'll be glad we have it.

William George -- Executive Vice President and Chief Financial Officer

And it will be fantastic. It will allow us to continue to invest and continue to run this company for the long term.

Joe Mondillo -- Sidoti -- Analyst

So the mix of service versus new construction compared to last year's second quarter, it was fairly similar?

William George -- Executive Vice President and Chief Financial Officer

On a same-store basis.

Brian E. Lane -- Chief Executive Officer, President and Director

It'd be about same.

William George -- Executive Vice President and Chief Financial Officer

It's the same.It's not worse because of construction there...

Joe Mondillo -- Sidoti -- Analyst

Okay great. Appreciate it. Thanks a lot.

William George -- Executive Vice President and Chief Financial Officer

All right Joe thanks

Operator

Thank you. And the next question comes from the line of Tahira Afzal of KeyBanc. Please go ahead.

Tahira Afzal -- KeyBanc -- Analyst

Hey Brian.

Brian E. Lane -- Chief Executive Officer, President and Director

Hey.

Tahira Afzal -- KeyBanc -- Analyst

So I guess if I look back a couple of years ago, you had this difficult comps here, and it would have been a great time to buy Comfort Systems shares. So I know the nonres market can't have momentum forever. But can you help me get comfortable around next year? And perhaps we can start at backlog. You seem to be comfortable that you have visibility maybe a little more than the prior cycle as you look out. Backlog can be lumpy. But net-net, do you see backlog growing as we head into the end of this year?

Brian E. Lane -- Chief Executive Officer, President and Director

Yes. So Tahira, we feel really good about the backlog. Probably close to half of it's for next year. Service continues to grow. And we're still looking at a lot of good opportunities, and that's why I think you see our optimism back of this year going into next year.

William George -- Executive Vice President and Chief Financial Officer

Pricing is good in the backlog, too.

Tahira Afzal -- KeyBanc -- Analyst

Right. So I mean if you look at next year, and I know you have -- you could see revenues growing again on an organic level pretty nicely. Number two, it sounds like you could have some closeouts again next year. Is that something possibly? And you start to see some trickle down of worker amortization. So could we see margins bounce back up next year as well?

William George -- Executive Vice President and Chief Financial Officer

I think Brian in his script said we really think we have -- the underlying backlog and those trends give us a great opportunity to do better in 2020. We got to go do it. It's 6 months away. But one of the things -- it's interesting you pointed out. We've had this pattern, and I just think it's -- I think some of it's coincidence. Some of it is that the investments we may take a while to pay off where we sort of every other year for the last 6 or 8 years, had a really good year, and then we've had a consolidation year and then a good year. And I don't think we're going to have the kind of step changes we've had in the past, but I think we have a really good opportunity for improvement in 2020 over 2019.

Tahira Afzal -- KeyBanc -- Analyst

I mean could we go back to 20% gross margins conceivably still? I know you've got...

William George -- Executive Vice President and Chief Financial Officer

Including Walker?

Brian E. Lane -- Chief Executive Officer, President and Director

I think without Walker, absolutely. With Walker, it'll probably be always a little bit under 20% at least in the short term.

Tahira Afzal -- KeyBanc -- Analyst

And a little under could be what? Because your financial model is so sensitive...

William George -- Executive Vice President and Chief Financial Officer

We're experiencing Walker for the first time for 1 quarter, but we made just 18.5. So you can argue 18.5 is a little under, so it's get better from there. It's a pretty small distance, right? But it's a lot of money, right? Now -- Comfort is now way over $2 billion. That gives us opportunities we didn't have. You knew us 2 or 3 years ago, we were half that size. And some of these investments, I think we've proven they take a little while to get. But we're going to run this company for the long term. Look, we could have pushed harder. At some point, this is a long game for us. And that's what our shareholders need us to do.

Tahira Afzal -- KeyBanc -- Analyst

Got it. Okay. Last question for me and I'll hop back in the queue. Given you have an upbeat outlook, and you guys have been pretty proactive in stock repurchases. Do you have -- obviously, a big move down versus how you see progressively the quarter shaping up beyond third quarter. How proactive can you be in terms of stock repurchases? And how quickly can you act?

William George -- Executive Vice President and Chief Financial Officer

So first, I want to say we get a lot of input from our Board of Directors. And as you guys -- as anybody who watches our stock knows our Chairman has been buying stock very regularly for years now. We believe our stock, if it trades down, is a good opportunity for Comfort. We don't do anything in a crazy way, but we will go get shares regularly. We'll watch our -- we have a little more debt than we've had after doing Walker. So that'll be a factor that -- there were some years, 5 or 6 years ago, when we really backed up the truck and bought more than 1 million shares in a year. That is -- we're not somebody who borrows money to buy our stock, but we might dedicate -- we will certainly dedicate a larger portion of our free cash flow to buying shares when they're down than we do when they're up. And I know that probably makes some people on this call nervous, but look at our track record, so.

Tahira Afzal -- KeyBanc -- Analyst

I appreciate your answer. I'll hop back in the queue.

William George -- Executive Vice President and Chief Financial Officer

Thank you

Operator

Thank you. And the next question comes from the line of Joe Mondillo, Sidoti. Please go ahead.

Joe Mondillo -- Sidoti -- Analyst

Hi guys. Thanks for taking my call. Just a few that I wanted to ask you. Just to follow up on Walker. If I'm doing the math correctly and if I back out -- or if I back the amortization cost out, the purchase counter amortization cost which are about $3 million, I'm getting to about a gross margin for Walker of roughly around -- or I guess the acquisitions, which includes the Indiana acquisition. So the gross margins in terms of the acquisitions for the quarter around 11%. Is that correct?

William George -- Executive Vice President and Chief Financial Officer

I don't know. I would have thought it would be slightly higher than that. But if something that is $400 million is drawing -- is averaging down something that's over $2 billion, obviously the number's pretty far off of 20. But having said that, they have much lower SG&A, right? So -- but no, it's not that low. There's other stuff -- don't forget there's purchase adjustments in there where we have something called a WIP adjustment that runs through ordinary income.

We also had changes in our earn-outs that were bigger than usual this quarter. And the biggest factor in the changes in our earnouts was just that our valuation company -- valuation firm, a big national accounting firm, decided they had to use a different discount rate, and so they imputed a bunch of interest. Those purchase adjustments, they can be very random. That's why we've separated them out and tell you about them. So some of that's what's in there. The other thing is while I'm on the subject, we have pro formas in there that people need to be very careful about.

The rules -- the way that you do a pro forma, when we did the our 2-year pro forma, we had to pretend under the rules that we bought it last year, so that the amortization we used for '19 was the amortization that will actually happen in '20. And then those purchase adjustments are not in there. So it is worthless to me. And if anybody can get usable information out of those, they're smarter than I am or they -- because -- so there's -- be very, very careful with these. We really do try to tell you what's happening, and there's a lot of -- by the way, we have segment reporting for the first time. The segment reporting, we are not allowed under GAAP to take out the purchase adjustments. So you're going to see some craziness in some of that. So don't get me wrong. I'm not saying oh, just trust me. I'm just saying don't trust that stuff because the rules are very wooden, and there's a lot of moving pieces.

Joe Mondillo -- Sidoti -- Analyst

All right. Well, I hope we can also trust there, too, at the same time.

William George -- Executive Vice President and Chief Financial Officer

Can. But I'm not -- this is not me trying to -- the most important -- you get my point. I'm not saying -- you get my point. I'm just trying to say...

Joe Mondillo -- Sidoti -- Analyst

I understand. I understand.

William George -- Executive Vice President and Chief Financial Officer

We tell you what we think we know. Yes.

Joe Mondillo -- Sidoti -- Analyst

So I wanted to follow up on the prior questioner asked, and you made a point about pricing very briefly. So I just wanted to follow up with that. You said the pricing in the backlog was pretty good. Is there any more color that you can provide there? It sounds like the environment has...

William George -- Executive Vice President and Chief Financial Officer

If you ask our company presidents how's your pricing in the backlog, they're like, "Oh, we're getting good pricing."

Brian E. Lane -- Chief Executive Officer, President and Director

Yes. Absolutely, Joe. And I think that's what's given us our optimism, that the pricing is hanging in there. So that's a good sign.

William George -- Executive Vice President and Chief Financial Officer

And the backlog is that really good companies.

Brian E. Lane -- Chief Executive Officer, President and Director

Yes. Yes.

William George -- Executive Vice President and Chief Financial Officer

It just feels good. It feels right.

Joe Mondillo -- Sidoti -- Analyst

So to follow up with that, looking at your order trends, it looks like, like new orders were sort of flat in the fourth quarter. They were down in the first quarter. I mean, this is core company earnings. And then in the second quarter, it looks like they were up about 4%. So improvement in the second quarter here, but still sort of low growth. So in terms of the pricing situation, and really what I'm trying to get at is capacity. What kind of capacity are you running at? And capacity is mainly based on personnel, and I know you've been having issues with labor and labor shortages in the market. Where is your capacity and ability to grow relative to the amount of personnel that you have and relative to the labor shortage issues?

Brian E. Lane -- Chief Executive Officer, President and Director

Well, I mean, the labor shortage have been going on for a while. I think we're dealing it through a whole host of things. I've talked about prefabrication using more technology. Right now, we're probably full. Everybody's busy, been working. But we're handling it. We're moving people between companies as needed. So I think we're just dealing with the labor situation the way it is.

Joe Mondillo -- Sidoti -- Analyst

I guess to go back -- to go to my main question then, where are you in terms of capacity to take on new -- to take on more work than you've seen in the past 12 months? And relative to that, is pricing related to that? Are you bumping up against capacity, and that's why you're dealing with pricing? Or is it not so much like that?

William George -- Executive Vice President and Chief Financial Officer

So it is almost uniformly true that we don't have slack anywhere. So what that means is we can't take on more work by just because we got guys waiting for more work. What we can do is we can benefit from the training we've done over the last few years. We're bringing on new people now that will help us next year. We can also charge more, understanding that we -- you can take up some additional work by taking -- by using workers that aren't as good as your core workforce but charging a lot more to cover that inefficiency.

You can spend more on your prefabrication and pull more off of the job site. So we're at a stage right now where we are trying to -- where we are, frankly, succeeding in getting more out of our workers. I will say one thing though. I've head Brian say this many times. We are not going to run our workers, our men and women that are out there doing this for us, into the ground. Last year was the first big year.

There is also a sustainability issue. So apart from what could you do, there's what should you do. And what we're going to do is make a lot of money for a really long time by -- our people like to work overtime, but we're going to try to strike the right balance. So that we have a long-term asset that continues to get better and send us checks -- send you guys checks.

Joe Mondillo -- Sidoti -- Analyst

Okay, great. And then last question that I had was in terms of free cash flow. It's going to -- I mean I already asked about this, and it's going to improve, especially as we go into 2020. I'm just wondering in terms of debt pay down, how you're thinking about that. Are you going to be using mostly your free cash flow? Or how aggressive are you going to be to try to pay down the balance sheet a little bit here in the next few quarters?

William George -- Executive Vice President and Chief Financial Officer

So our -- that also that sort of implies also what are we going to do in that area. The 2 moving pieces on that, because we've already commented on how we think we'll get a lot of good free cash flow, are how much stock are we going to buy back? And are we going to do more acquisitions? I think the answer is we're going to have a very high standard for doing any acquisitions that would be a large user of capital. We're going to probably prioritize gearing down a little bit our debt for the next year. There are acquisitions that might not use as much capital that are still at least possible out there. And then also as far as how much we're going to spend on our shares, that is sensitive somewhat to what price it trades at. We think it's -- but we're only going to spend a portion of our free cash flow on that. That could be 10% or 30%. It's not going to be -- but it's not going to be 100%. It's not going to be 200%, for sure.

Brian E. Lane -- Chief Executive Officer, President and Director

And Joe, we also pay a dividend $0.10 per share per quarter that we'll maintain.

Joe Mondillo -- Sidoti -- Analyst

Okay perfect. Well thanks a lot guys. Good luck.

Brian E. Lane -- Chief Executive Officer, President and Director

Thanks.

Operator

Thank you. And the next question comes from the line of Adam Thalhimer from Thompson, Davis. Please go ahead.

Adam Thalhimer -- Thompson Davis -- Analyst

Okay. I just wanted to take one more crack at the electrical margins because they were 10% in the quarter. You -- is that a normal number? I mean do you think it improves from there in Q3?

William George -- Executive Vice President and Chief Financial Officer

I don't think that we're 10% in the quarter, but the problem is when you're looking at margins, you're looking at all you can look at, which is what do the incremental Walker do and what do the incremental margins do. But the problem is we're running amortization -- half of the amortization is running through those gross margins that we're showing you. We have purchase adjustments relating to guarantees that we and the seller make to each other about how the work in process is going to go. So if I owe them money on what's called a WIP adjustment, that runs right through that line. So I think you'll see -- it's not 10% based on human beings doing work and getting paid. How much they spend doing the work and then how much they got paid for it.

Brian E. Lane -- Chief Executive Officer, President and Director

It's higher than that.

William George -- Executive Vice President and Chief Financial Officer

It's not 10%. To get to 10%, you got to subtract that amortization. And by the way, next quarter, the earnout might go the other direction, and it might look really big. But we'll -- so no, it's not 10%. And if it was, that would be a problem.

Brian E. Lane -- Chief Executive Officer, President and Director

Yes. Yes.

Adam Thalhimer -- Thompson Davis -- Analyst

All right. Well, we won't model at that -- using that as line items, so that's fine. So then last one for me is just on the tax rate, what a good estimate is going forward at this point.

William George -- Executive Vice President and Chief Financial Officer

So that's a hard one because we had these discretes in the first couple of quarters, and they are going to affect the full year. Right now, we don't have a basis to sort of -- I think what we put in the -- we said 24 to 28. The range is probably, if we had some more discretes, it's probably 24. I think we're not likely to be at 28 just because it'd be hard to average up to that. So for the full year, 25 to 26; but for the second half, higher than that, because obviously, to get to 25 to 26 for the full year, you have to average up. But I will say that this is the same kind of ranges at a lower level that we've had in past years, and you usually just best pick in the midpoint because we're telling you what we know. We hope to give some more discrete items. It could happen, for sure. But yes, these are all good questions today. No doubt about it. So.

Adam Thalhimer -- Thompson Davis -- Analyst

Thank you so much.

Operator

We have no further questions. I would now like to turn the call back to Brian Lane for closing remarks.

Brian E. Lane -- Chief Executive Officer, President and Director

All right. Thank you, everyone, for joining the call today. Comfort Systems is in very good shape, and we will continue to make decisions to benefit the long-term benefit of all our stakeholders. We're excited about the future. Thank you for joining the call, and hope you all have a great weekend.

William George -- Executive Vice President and Chief Financial Officer

Thanks.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Julie Shaeff -- Senior Vice President and Chief Accounting Officer

Brian E. Lane -- Chief Executive Officer, President and Director

William George -- Executive Vice President and Chief Financial Officer

Brent Thielman -- D.A. Davidson -- Analyst

Adam Thalhimer -- Thompson Davis -- Analyst

Joe Mondillo -- Sidoti -- Analyst

Tahira Afzal -- KeyBanc -- Analyst

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