FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-14926
Joule Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-2735672
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1245 Route 1 South, Edison, New Jersey 08837
(Address of principal executive officers)
(Zip Code)
(908) 548-5444
(Registrant's telephone number including area code)
Indicate by check mark whether the Registrant (1) has filed all reports 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
As of May 1, 1995 3,610,000 shares of the Registrant's common stock were
outstanding.
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<TABLE>
Part I - Financial Information
Item 1. Financial Statements
Joule' Inc. and Subsidiaries
Consolidated Balance Sheets
<CAPTION>
March 31, September 30,
1995 1994
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $34,000 $49,000
Accounts receivable, less allowance for doubtful
accounts of $216,000 and $186,000 respectively 6,369,000 6,293,000
Prepaid expenses and other current assets 383,000 681,000
------------- -------------
Total Current Assets 6,786,000 7,023,000
PROPERTY AND EQUIPMENT, NET OF ACCUMULATED
DEPRECIATION 1,668,000 1,282,000
GOODWILL AND OTHER INTANGIBLES 144,000 156,000
OTHER ASSETS 114,000 115,000
------------- -------------
$8,712,000 $8,576,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable to bank $2,995,000 $3,363,000
Current portion of long term debt 25,000 0
Accounts payable and accrued expenses 994,000 906,000
Accrued payroll and related taxes 902,000 701,000
Income taxes 0 215,000
------------- -------------
Total Current Liabilities 4,916,000 5,185,000
------------- -------------
LONG TERM DEBT 469,000 424,000
------------- -------------
Total Liabilities 5,385,000 5,609,000
------------- -------------
STOCKHOLDERS' EQUITY:
Preferred stock,$.01 par value:
Authorized 500,000 shares, none outstanding 0 0
Common stock,$.01 par value:
Authorized 10,000,000 shares-issued 3,760,000
and 3,750,000 shares respectively 38,000 38,000
Paid-in capital 3,502,000 3,488,000
Retained earnings (deficit) 195,000 (151,000)
------------- -------------
3,735,000 3,375,000
LESS: Cost of 150,000 shares of common stock held in treasury 408,000 408,000
----------------- ---------------
Total Stockholders' Equity 3,327,000 2,967,000
------------- -------------
$8,712,000 $8,576,000
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
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<TABLE>
Joule' Inc. and Subsidiaries
Consolidated Statements of Income
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31, March 31, March 31,
1995 1994 1995 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUES $9,806,000 $9,053,000 $20,873,000 $18,049,000
COSTS, EXPENSES, AND OTHER:
COST OF SERVICES 8,336,000 7,605,000 17,547,000 15,163,000
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,265,000 1,181,000 2,572,000 2,315,000
INTEREST EXPENSE 94,000 63,000 191,000 123,000
OTHER (INCOME)/EXPENSE (3,000) (2,000) 5,000 (3,000)
--------------- --------------- --------------- ---------------
INCOME BEFORE INCOME TAXES 114,000 206,000 558,000 451,000
INCOME TAXES 43,000 39,000 212,000 113,000
--------------- --------------- --------------- ---------------
NET INCOME $71,000 $167,000 $346,000 $338,000
NET INCOME PER COMMON SHARE $0.02 $0.05 $0.10 $0.09
NUMBER OF SHARES AND
EQUIVALENTS OUTSTANDING 3,629,000 3,622,000 3,625,000 3,619,000
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
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<TABLE>
Joule' Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<CAPTION>
Six Months Ended
March 31, March 31,
1995 1994
<S> <C> <C>
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income $346,000 $338,000
Adjustments to reconcile net income to net cash flows
provided from (used in) operating activities:
Depreciation and amortization 152,000 109,000
Loss from disposal of equipment 4,000 0
Provision for losses on accounts receivable 30,000 35,000
Changes in operating assets and liabilities:
Accounts receivable (106,000) (866,000)
Prepaid expenses and other assets 297,000 (209,000)
Accounts payable and accrued expenses 88,000 (3,000)
Accrued payroll and related taxes 201,000 210,000
Income taxes (215,000) (7,000)
--------------- ---------------
Net cash flows from (used in) operating activities 797,000 (393,000)
---------------- ----------------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisitions of property and equipment (528,000) (182,000)
---------------- ----------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Increase (decrease) in loans payable to bank (368,000) 576,000
Payment of long term debt (6,000) 0
Additions to long term debt 76,000 0
Proceeds from exercise of stock options 14,000 0
---------------- ----------------
Net cash flows from (used in) financing activities (284,000) 576,000
---------------- ----------------
NET CHANGE IN CASH (15,000) 1,000
CASH, BEGINNING OF PERIOD 49,000 42,000
--------------- ---------------
CASH, END OF PERIOD $34,000 $43,000
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $189,000 $117,000
Income taxes paid $486,000 $120,000
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
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JOULE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
(1) The consolidated balance sheet at the end of the preceding fiscal year has
been derived from the audited consolidated balance sheet contained in the
Company's Form 10-K and is presented for comparative purposes. All other
financial statements are unaudited. All unaudited amounts are subject to year
end adjustments and audit, but the Company believes all adjustments, consisting
only of normal and recurring adjustments, necessary to present fairly the
financial position, results of operations and changes in cash flows for all
interim periods presented have been made. The results of operations for
interim periods are not necessarily indicative of the operating results for
the full year.
Footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principals have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These consolidated financial statements should be read
in conjunctions with the financial statements and notes thereto included in
the Company's Form 10-K and Annual Report to Stockholders for the most recent
fiscal year.
<PAGE>
<PAGE>
JOULE INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
The Company's revenues are derived from providing labor outsourcing
services to its customers. Revenues increased 8% to $9.8 million during the
three months ended March 31, 1995 from $9.1 million in the prior year.
Revenue for the first six months of fiscal 1995 amounted to $20.9 million, a
16% increase over the prior year. The Company's outsourcing services include
staffing services and industrial contracting. Staffing services revenue
increased 22%, to $4.9 million and $9.8 million, for both the three and six
months ended March 31, 1995 compared to the same periods a year ago. The
increases in revenue were attributable to an expanded customer base of large
corporations as the demand for such services grew. Industrial contracting
revenues were $4.9 million in the current quarter, 2% lower than a year
earlier. Six month revenues increased 11% to $11.1 million from $10.0
million in the prior year period. Cost of services increased to 85% of
revenue in the three months ended March 31, 1995 compared to 84.0% a
year earlier due to the completion of several non-recurring marginal
contracts, while for six months this ratio approximated 84.0% in both
years. These expenses consist primarily of compensation to employees on
assignment to clients and related costs, including social security,
unemployment taxes, general liability and workers' compensation insurance,
and other costs of services.
Selling, general and administrative expenses amounted to $1,265,000 and
$2,572,000 in the three and six months ended March 31, 1995 compared to
$1,181,000 and $2,315,000 a year earlier. The trend in improvement
of such expenses as a percentage of revenue continued, to 12.9% from 13.0%
in the three month periods and to 12.3% from 12.8% in the six month periods.
These expenses included the salaries and related costs of staff employees,
provision for the allowance for doubtful accounts, advertising, professional
fees and other costs related to maintaining the Company's branch offices.
Interest expense increased to $94,000 and $191,000 in the current periods
compared to $63,000 and $123,000 in the prior year as both rates and average
borrowings increased. The income tax rate was 38% in the current periods,
an increase from 19% and 25% in the respective three and six month periods a
year earlier because of the use of net operating loss carry forwards and
accumulated tax credits in fiscal 1994. As a result of the above, net
income was reduced to $71,000 or $0.02 per share in the current three month
period from $167,000 or $0.05 per share a year ago; for the six months ended
March 31, 1995 net income increased to $346,000 or $0.10 per share from
$338,000 or $0.09 a share in the prior year.<PAGE>
<PAGE>
JOULE INC AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
Liquidity and Capital Resources
Current assets at March 31, 1995 were $6,786,000 as compared to $7,023,000 at
September 30, 1994 and current liabilities were $4,916,000 compared to
$5,185,000 as of the earlier date. Employees typically are paid on a
weekly basis. Clients generally are billed on a weekly basis. The Company
has generally utilized bank borrowings to meet its working capital needs.
The Company has a $4,000,000 bank line of credit; loans thereunder are
secured principally by receivables and bear interest at the bank's base rate
plus 1 percent, $2,995,000 was outstanding under this line as of
March 31, 1995.
The company occupied a new building in the first quarter of fiscal 1995.
This facility was constructed next to its existing headquarters and was
financed by a $500,000 mortgage loan. It is the operational headquarters for
the staffing services division of the Company. The Company believes that
internally generated funds and available borrowings will provide sufficient
funds to meet its requirements for the next 12 months.<PAGE>
<PAGE>
JOULE IN AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which this
report is filed.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
JOULE INC.
(Registrant)
May 12, 1995
E. N. Logothetis
E. N. Logothetis, Chairman
(Principal Executive Officer)
May 12, 1995
Bernard G. Clarkin
Bernard G. Clarkin, Vice President and Chief
Financial Officer (Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000798168
<NAME> JOULE INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 34
<SECURITIES> 0
<RECEIVABLES> 6,585
<ALLOWANCES> 216
<INVENTORY> 0
<CURRENT-ASSETS> 6,786
<PP&E> 3,958
<DEPRECIATION> 2,290
<TOTAL-ASSETS> 8,712
<CURRENT-LIABILITIES> 4,916
<BONDS> 469
<COMMON> 38
0
0
<OTHER-SE> 3,289
<TOTAL-LIABILITY-AND-EQUITY> 8,712
<SALES> 0
<TOTAL-REVENUES> 20,873
<CGS> 0
<TOTAL-COSTS> 17,547
<OTHER-EXPENSES> 2,547
<LOSS-PROVISION> 30
<INTEREST-EXPENSE> 191
<INCOME-PRETAX> 558
<INCOME-TAX> 212
<INCOME-CONTINUING> 346
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 346
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
