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 December 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 (IRS Employer
of incorporation or Identification No.)
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 February 6, 1996 3,610,000 shares of the Registrant's common stock
were outstanding.
<PAGE>Part I - Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
Joule' Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, September 30,
ASSETS 1995 1995
<S> <C> <C>
CURRENT ASSETS:
Cash $79,000 $70,000
Accounts receivable,
less allowance for
doubtful accounts of
$158,000 and $140,000
respectively 8,440,000 8,514,000
Prepaid expenses and
other current assets 165,000 318,000
Total Current Assets 8,684,000 8,902,000
PROPERTY AND EQUIPMENT,
NET OF ACCUMULATED
DEPRECIATION 1,776,000 1,698,000
GOODWILL AND OTHER
INTANGIBLES 126,000 132,000
OTHER ASSETS 69,000 70,000
$10,655,000 $10,802,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable to bank $3,948,000 $4,105,000
Accounts payable and
accrued expenses 880,000 1,137,000
Accrued payroll and
related taxes 1,035,000 1,083,000
Income taxes 42,000 77,000
Current portion of
long term debt 25,000 25,000
Total Current Liabilities 5,930,000 6,427,000
LONG TERM DEBT 450,000 456,000
Total Liabilities 6,380,000 6,883,000
STOCKHOLDERS' EQUITY:
Preferred stock,
$.01 par value:
Authorized 500,000 shares,
none outstanding --- ---
Common stock,$.01 par value:
Authorized 10,000,000
shares-issued 3,760,000
shares 38,000 38,000
Paid-in capital 3,502,000 3,502,000
Retained earnings 1,143,000 787,000
4,683,000 4,327,000
LESS: Cost of 150,000
shares of common stock
held in treasury 408,000 408,000
Total Stockholders'
Equity 4,275,000 3,919,000
$10,655,000 $10,802,000
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Joule' Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended
December 31, December 31,
1995 1994
<S> <C> <C>
REVENUES $13,400,000 $11,067,000
COSTS, EXPENSES, AND OTHER:
Cost of services 11,029,000 9,211,000
Selling, general &
administrative expenses 1,659,000 1,307,000
Interest Expense 112,000 97,000
Other 6,000 8,000
INCOME BEFORE INCOME TAX
PROVISION 594,000 444,000
INCOME TAX PROVISION 238,000 169,000
NET INCOME $356,000 $275,000
NET INCOME PER COMMON SHARE $0.10 $0.08
AVERAGE NUMBER OF SHARES AND
EQUIVALENTS OUTSTANDING 3,643,000 3,620,000
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE><TABLE>
<CAPTION>
Joule' Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Three Months Ended
December 31, December 31,
1995 1994
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income $356,000 $275,000
Adjustments to reconcile
net income to net cash
flows used in operating
activities:
Depreciation and
amortization 90,000 66,000
Provision for losses
on accounts receivable 18,000 15,000
Changes in operating assets
and liabilities:
Accounts receivable 56,000 (609,000)
Prepaid expenses and
other assets 154,000 12,000
Accounts payable and
accrued expenses (257,000) 118,000
Accrued payroll and
related taxes (48,000) (36,000)
Income taxes (35,000) 16,000
Net cash flows used in
operating activities 334,000 (143,000)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisitions of property and
equipment (162,000) (268,000)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Increase (decrease) in
loans payable to bank (157,000) 325,000
Payment of long term debt (6,000) 0
Additions to long term debt 0 76,000
Proceeds from exercise of
stock options 0 14,000
Net cash flows from (used in)
financing activities (163,000) 415,000
NET CHANGE IN CASH 9,000 4,000
CASH, BEGINNING OF PERIOD 70,000 49,000
CASH, END OF PERIOD $79,000 $53,000
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $89,000 $92,000
Income taxes paid $274,000 $153,000
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE> 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 change 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 conjunction 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>
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 21% to $13.4 million during the first
three months of fiscal 1996 from $11.1 million in 1995. The Company's
outsourcing services include staffing services and industrial contracting.
Staffing services revenue increased 41% to $6.9 million in the first three
months of 1996, from $4.9 million in the prior year period. Industrial
contracting revenue increased 5 % to $6.5 million in the first quarter compared
to $6.2 million a year earlier. Cost of services improved to 82.3% of revenue
in the first quarter of 1996 compared to 83.2% a year ago. 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 $1,659,000 in the first
three months of fiscal 1996 compared to $1,307,000 in the prior year. This
represented 12.4% of revenues in the current period, an increase from 11.8% a
year earlier. These expenses included the salaries and related costs of staff
employees, provision for the allowance for doubtful accounts, advertising,
depreciation, professional fees and other costs related to maintaining the
Company's branch offices. Interest expense increased to $12000 in the current
period compared to $97,000 in the prior year. The income tax rate was 40% in
the current three month period, an increase from 38% a year earlier because
of the use of job tax credits in fiscal 1995. As a result of the above, net
income improved to $356,000 or $0.10 per share for the first three months of
1996 compared to $275,000 or $0.08 per share in the prior year period.<PAGE>
<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 December 31, 1995 were $8,684,000 as compared to $8,902,000
at September 30, 1995 and current liabilities were $5,930,000 compared to
$6,427,000 as of September 30, 1995. 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 $4,500,000 bank line of credit; loans thereunder are secured
principally by receivables and bear interest at the bank's percent;
$3,948,000 was outstanding under this line as of December 31, 1995.
The Company believes that internally generated funds and available borrowings \
will provide sufficient cash flow to meet its requirements for the next 12
months.<PAGE>
<PAGE>
JOULE' IN AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on
February 7, 1996.
(b) The following directors were elected at the annual meeting with the votes
as indicated:
<TABLE>
VOTES FOR VOTES WITHHELD
<S> <C> <C>
Richard Barnitt 3,556,208 3,200
Paul DeBacco 3,557,208 2,200
Anthony Grillo 3,555,878 3,530
Robert W. Howard 3,556,058 3,350
Emanuel N. Logothetis 3,557,408 2,000
Nick M. Logothetis 3,557,408 2,000
Steven Logothetis 3,557,408 2,000
</TABLE>
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)
February 9, 1996
E. N. Logothetis
E. N. Logothetis, Chairman
(Principal Executive Officer)
February 9, 1996
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> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 79
<SECURITIES> 0
<RECEIVABLES> 8,598
<ALLOWANCES> 158
<INVENTORY> 0
<CURRENT-ASSETS> 8,684
<PP&E> 4,330
<DEPRECIATION> 2,554
<TOTAL-ASSETS> 10,655
<CURRENT-LIABILITIES> 5,930
<BONDS> 450
0
0
<COMMON> 38
<OTHER-SE> 4,237
<TOTAL-LIABILITY-AND-EQUITY> 10,655
<SALES> 0
<TOTAL-REVENUES> 13,400
<CGS> 0
<TOTAL-COSTS> 11,029
<OTHER-EXPENSES> 1,647
<LOSS-PROVISION> 18
<INTEREST-EXPENSE> 112
<INCOME-PRETAX> 594
<INCOME-TAX> 238
<INCOME-CONTINUING> 356
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 356
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
