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, 2002
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 1-9477
Joule Inc.
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(Exact name of registrant as specified in its charter)
Delaware 22-2735672
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1245 Route 1 South, Edison, New Jersey 08837
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(Address of principal executive officers) (Zip Code)
(732) 548-5444
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( 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 [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b.2 of the Act).
Yes [ ] No [X]
As of February 12, 2003, 3,684,000 shares of the Registrant's common stock were
outstanding.
Part I - Financial Information
Item 1. Financial Statements
Joule Inc. And Subsidiaries
Consolidated Balance Sheets
December 31, September 30,
2002 2002
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ASSETS (Unaudited)
- --------------
CURRENT ASSETS:
Cash $ 214,000 $ 174,000
Accounts receivable, less allowance
for doubtful accounts of $503,000 at December 31
and September 30, respectively 7,026,000 8,954,000
Prepaid insurance 1,167,000 1,210,000
Prepaid expenses and other current assets 696,000 550,000
------------- -------------
Total Current Assets 9,103,000 10,888,000
PROPERTY AND EQUIPMENT, NET 4,253,000 4,269,000
GOODWILL 1,129,000 1,129,000
OTHER ASSETS 223,000 213,000
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Total Assets $ 14,708,000 $ 16,499,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Loans payable to bank $ 3,700,000 $ 3,980,000
Accounts payable and accrued expenses 1,098,000 1,719,000
Accrued payroll and related taxes 828,000 1,604,000
------------- -------------
Total Current Liabilities 5,626,000 7,303,000
CAPITAL LEASE OBLIGATIONS 170,000 184,000
DEFERRED COMPENSATION 88,000 74,000
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Total Liabilities 5,884,000 7,561,000
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value:
Authorized 500,000 shares, none outstanding - -
Common stock, $.01 par value:
Authorized 10,000,000 shares; issued 3,828,000 shares 38,000 38,000
Additional paid-in capital 3,674,000 3,672,000
Retained earnings 5,494,000 5,610,000
------------- -------------
9,206,000 9,320,000
LESS: Cost of 144,000 shares of common stock held in treasury
at December 31 and Septemer 30, respectively 382,000 382,000
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Total Stockholders' Equity 8,824,000 8,938,000
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Total Liabilities and Stockholders' Equity $ 14,708,000 $ 16,499,000
============= =============
See accompanying notes to consolidated financial statements.
2
Joule Inc. And Subsidiaries
Consolidated Statements of Operations
Three Months Ended
----------------------------
December 31, December 31,
2002 2001
------------ ------------
(Unaudited) (Unaudited)
REVENUES $ 17,017,000 $ 19,389,000
------------ ------------
COSTS, EXPENSES AND OTHER:
Cost of services 13,785,000 15,525,000
Selling, general & administrative expenses 3,386,000 3,635,000
Interest expense 34,000 58,000
Interest income - (6,000)
------------ ------------
(LOSS) INCOME BEFORE INCOME TAXES (188,000) 177,000
INCOME TAX (BENEFIT) PROVISION (73,000) 61,000
------------ ------------
NET (LOSS) INCOME $ (115,000) $ 116,000
============ ============
BASIC AND DILUTED (LOSS) EARNINGS PER SHARE ($0.03) $ 0.03
============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING-BASIC 3,683,000 3,682,000
============ ============
WEIGHTED AVERAGE COMMON SHARES AND
COMMON EQUIVALENTS OUTSTANDING - DILUTED 3,683,000 3,687,000
============ ============
See accompanying notes to consolidated financial statements.
3
Joule Inc. And Subsidiaries
Consolidated Statements of Cash Flows
Three Months Ended
----------------------------
December 31, December 31,
2002 2001
------------- -------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (115,000) $ 116,000
Adjustments to reconcile net (loss) income to
net cash flows provided by (used in) operating
activities:
Depreciation and amortization 228,000 230,000
Writeoffs of property and equipment 26,000 -
Provision for losses on accounts receivable - 51,000
Changes in operating assets and liabilities:
Accounts receivable 1,928,000 1,842,000
Prepaid expenses and other assets (113,000) (23,000)
Accounts payable and accrued expenses (623,000) (287,000)
Accrued payroll and related taxes (776,000) (691,000)
Deferred compensation 14,000 18,000
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Net cash flows provided by operating activities 569,000 1,256,000
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (222,000) (123,000)
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Net cash flows used in investing activities (222,000) (123,000)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in loans payable to bank, net (280,000) (1,150,000)
Repayment of obligations under capital leases (27,000) (20,000)
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Net cash flows used in financing activities (307,000) (1,170,000)
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NET CHANGE IN CASH 40,000 (37,000)
CASH, BEGINNING OF PERIOD 174,000 251,000
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CASH, END OF PERIOD $ 214,000 $ 214,000
============= =============
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 37,000 $ 61,000
============= =============
Income taxes paid $ 21,000 $ 82,000
============= =============
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTMENT AND FINANCING ACTIVITIES:
Capitalized vehicle leases $ (16,000) $ -
============= =============
See accompanying notes to consolidated financial statements.
4
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. Management 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 principles have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These unaudited consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
included in the Company's Form 10-K and Annual Report to Stockholders for the
most recent fiscal year.
(2) In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations", which addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS 143 requires an enterprise to record the
fair value of an asset retirement obligation as a liability in the period in
which it incurs a legal obligation associated with the retirement of tangible
long-lived assets. Since the requirement is to recognize the obligation when
incurred, approaches that have been used in the past to accrue the asset
retirement obligation over the life of the asset are no longer acceptable. SFAS
143 also requires the enterprise to record the contra to the initial obligation
as an increase to the carrying amount of the related long-lived asset (i.e., the
associated asset retirement costs) and to depreciate that cost over the life of
the asset. The liability is increased at the end of each period to reflect the
passage of time (i.e., accretion expense) and changes in the estimated future
cash flows underlying the initial fair value measurement. The Company adopted
SFAS 143 effective October 1, 2002 and it had no effect on the consolidated
financial statements.
(3) In October 2001, the FASB issued SFAS No. 144, "Accounting for
Impairment or Disposal of Long-Lived Assets", which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
While SFAS 144 supersedes SFAS 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be disposed of", it retains many of the
fundamental provisions of that statement. SFAS 144 also supersedes the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a segment of a business. However, it retains
the requirement in Opinion No. 30 to report separately discontinued operations
and extends that reporting to a component of an entity that either has been
disposed of (by sale, abandonment, or in distribution to owners) or is
classified as held for sale. The Company adopted SFAS 144 effective October 1,
2002 and it had no effect on the consolidated financial statements.
5
(4) Segment Disclosures
The Company has determined that its reportable segments are those that
are based on the Company's method of internal reporting, which disaggregates its
business by segment. The Company's reportable segments are: (1) Commercial
Staffing, (2) Technical Staffing and (3) Industrial Staffing.
Information concerning operations by operating segment is as follows
(in 000's):
Three Months Ended
December 31,
-------------------------
2002 2001
---------- ----------
Revenues
Commercial .................... $ 4,869 $ 5,904
Technical ..................... 6,455 5,994
Industrial .................... 5,693 7,491
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$ 17,017 $ 19,389
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(Loss) Income Before Income Taxes
Commercial .................... $ 116 $ 246
Technical ..................... 595 517
Industrial .................... 145 438
Corporate (unallocated,
including interest) ......... (1,044) (1,024)
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$ (188) $ 177
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(5) Litigation
The Company is subject to various claims and legal proceedings that
arise in the ordinary course of its business activities. Management believes
that any liability that may ultimately result from the resolution of these
matters will not have a material adverse effect on the financial condition,
results of operations or liquidity of the Company.
(6) Subsequent Event
On January 27, 2003, the Company acquired Wennik & Motta in an asset
purchase business combination. The acquisition cost was not significant to the
Company. Wennik & Motta is a small staffing firm in Boston, Massachusetts, which
places marketing and creative personnel with its clients.
6
JOULE INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Critical Accounting Policies
During December 2001, the Securities and Exchange Commission ("SEC")
published a Commission Statement in the form of Financial Reporting Release No.
60 which encouraged that all registrants discuss their most "critical accounting
policies" in management's discussion and analysis of financial condition and
results of operations. The SEC has defined critical accounting policies as those
that are both important to the portrayal of a company's financial condition and
results, and that require management's most difficult, subjective or complex
judgments, often as a result of the need to make estimates about the effect of
matters that are inherently uncertain. While the Company's significant
accounting policies are summarized in Note 2 to the consolidated financial
statements included in the Company's Form 10-K for the fiscal year ended
September 30, 2002, it believes the following accounting policies to be
critical:
Revenue - The Company's revenues are derived from providing staffing
services to its customers. Such services include providing commercial (office
and light industrial) workers, technical (engineering, scientific and
information technology) personnel, and industrial (skilled craft industrial
plant and facility maintenance) labor. Substantially all revenue is billed on a
direct cost plus markup basis. Revenues are recorded when services are rendered.
Long-Lived Assets - Except for goodwill and intangible assets,
beginning in fiscal 2002, the Company reviews amortizable long-lived assets and
goodwill for impairment whenever events or changes in business circumstances
occur that indicate the carrying amount of the assets may not be recovered. In
accordance with SFAS No. 121, "Accounting for Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of", the Company assesses the
recoverability of long-lived assets held and to be used based on undiscounted
cash flows. In accordance with SFAS No. 142, goodwill is not amortized but is
tested at least annually for impairment. If impairment is indicated, the
impairment is measured as the difference between the carrying value and the fair
value of the asset.
Valuation of Stock Options - Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123),
permits an entity to continue to account for director and employee stock-based
compensation under APB Opinion No. 25, "Accounting for Stock Issued to
Employees", or adopt a fair value based method of accounting for such
compensation. The Company has elected to continue to account for stock-based
compensation under Opinion No. 25. Accordingly, compensation expense is
recognized on fixed option grants only if the current fair value of the
underlying stock exceeds the exercise price of the option at the date of grant
and it is recognized on a straight-line basis over the vesting period. Had the
Company elected to adopt the measurement provisions of SFAS No. 123 compensation
expense would have been recognized based on the fair value of the options at the
grant date. Estimating the fair value of stock options involves a number of
judgments and variables that are subject to significant change. A change in the
fair value estimate could have a significant effect on the amount of the
proforma net (loss) income disclosed in Note 5 to the Company's consolidated
financial statements included in Form 10-K for the fiscal year ended September
30, 2002.
Management Estimates - Management of the Company is required to make
certain estimates and assumptions during the preparation of consolidated
financial statements in accordance with accounting principles generally accepted
in the United States of America. These estimates and assumptions impact the
7
reported amount of assets and liabilities and disclosures of contingent assets
and liabilities as of the date of the consolidated financial statements.
Estimates and assumptions are reviewed periodically and the effects of revisions
are reflected in the consolidated financial statements in the period they are
determined to be necessary. Some of the more significant estimates made by
management include the allowance for doubtful accounts and various other
operating allowances and accruals.
Related Party Transactions
The Company paid certain major stockholders Board of Director's fees of
approximately $3,000 and $4,000 for the three months ended December 31, 2002 and
December 31, 2001, respectively. For the three months ended December 31, 2002
and December 31, 2001 the Company recognized $95,000 and $102,000, respectively,
in revenues from related parties. In addition, accounts receivable include
amounts due for services rendered to a company owned by a stockholder of $66,000
and $36,000 as of December 31, 2002 and September 30, 2002, respectively.
Results of Operations
The Company's revenues are derived from providing staffing services to
its customers. Such services include providing commercial (office and light
industrial) workers, technical (engineering, scientific and information
technology) personnel, and industrial (skilled craft industrial plant and
facility maintenance) labor. Substantially all revenue is billed on a direct
cost plus markup basis. Revenue decreased 12% to $17.0 million during the first
three months of fiscal 2003 compared to $19.4 million for the year earlier
period. Technical staffing revenue increased 8% to $6.5 million in the current
period from $6.0 million in the year earlier period. This increase related to
the continuing strength of its scientific business that places personnel with
pharmaceutical, bio-tech, chemical, and consumer products clients. Commercial
staffing revenue decreased 17% to $4.9 million in 2003 from $5.9 million in
2002. Industrial staffing revenue decreased 24% to $5.7 million in 2003 from
$7.5 million in 2002. These declines were due to the uneven recovery of the
economy which negatively impacted demand for the Company's light-industrial and
industrial personnel. Demand for these services was uneven throughout fiscal
2002 and weakened in the first quarter of fiscal 2003.
Cost of services were 81.0% of revenues in the 2003 first quarter
compared to 80.0% for the 2002 first quarter. 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, including travel expenses
and a van transportation service which transports some commercial staffing
workers to job sites.
8
Selling, general and administrative expenses were $3.4 million in the
2003 period compared to $3.6 million for the 2002 period, representing 19.9% and
18.7% of revenues in the 2003 and 2002 periods, respectively. Selling, general
and administrative expenses include staff payroll and related expenses in
addition to advertising, professional fees, depreciation and amortization,
provision for the allowance for doubtful accounts, rent and other costs related
to maintaining the Company's branch offices. The percentage increase was
principally related to lower revenue in 2003. However, the Company reduced
actual selling, general and administrative expenses by $249,000 for the period
2003 compared to the period 2002 through a decrease in staff payroll and related
expenses, a reduction in the provision for losses on accounts receivable and an
overall decrease in other costs related to the Company's branch offices. The
Company continues to review and reduce personnel and other branch costs which
has had a positive impact during the latter part of 2002, and will further
benefit future periods.
Interest expense decreased $18,000 to $34,000 in the 2003 quarter
compared to $52,000 in the 2002 quarter, reflecting a decrease in average
borrowings along with decreases in interest rates. Interest income of $6,000 in
2002 relates to a note receivable, which was paid in full in 2002. After giving
effect to the utilization of certain tax credits, the effective tax rate benefit
for 2003 was 39%; for 2002 the effective tax rate was 34%. As a result of the
above, net loss was $115,000 or $0.03 per share, basic and diluted, in the
fiscal 2003 period compared with net income of $116,000 or $0.03 per share,
basic and diluted, for the fiscal 2002 period.
Liquidity and Capital Resources
Current assets at December 31, 2002 were $9,103,000 compared to current
assets of $10,888,000 at September 30, 2002 and current liabilities were
$5,626,000 compared to $7,303,000 as of September 30, 2002. The decrease in
current assets principally relates to a $1.9 million reduction in accounts
receivable due to lower revenue in the current period compared to the fourth
quarter of fiscal 2002, as well as a continuing emphasis on credit and
collections. The decrease in current liabilities results from a $280,000
decrease in bank borrowings, reflective of the lower receivables noted above, a
$621,000 decrease in accounts payable and accrued expenses principally related
to normal accounts payable fluctuations and a lower sales level for the current
quarter compared to the quarter ended September 30, 2002, and a $776,000
decrease in accrued payroll and related taxes due to a lower level of business
in the final week of the current period as compared to the final week of
September 2002. The Company's capital expenditures are generally relatively
modest due to the nature of its business.
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 $9,000,000 bank line of credit
that matures May 31, 2003; loans thereunder are secured principally by
receivables with interest at LIBOR plus one and one-half percent with a prime
rate less one-half percent option; $3,700,000 was outstanding under this line as
of December 31, 2002. The Company believes that the bank line of credit will be
extended or replaced at similar terms in May and that internally generated funds
and available borrowings will provide sufficient cash flow to meet its
requirements for at least the next 12 months.
9
Below is a table that presents the Company's contractual obligations
and commercial commitments as of December 31, 2002:
Payments Due by Fiscal Year
---------------------------------------------------------
2005 and
Total 2003 2004 Thereafter
------------ ------------ ------------ ------------
Loan payable to bank .................. $ 3,700,000 $ 3,700,000 $ - $ -
Capital lease obligations
including interest ................ 303,000 95,000 121,000 87,000
Operating leases ...................... 755,000 297,000 314,000 144,000
------------ ------------ ------------ ------------
Total contractual cash obligations .... $ 4,758,000 $ 4,092,000 $ 435,000 $ 231,000
============ ============ ============ ============
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, the Company is exposed to
fluctuations in interest rates as it seeks debt financing to meet its working
capital needs. The Company does not employ specific strategies, such as the use
of derivative instruments or hedging, to manage its interest rate exposures.
Since the fiscal year ended September 30, 2002, there has been no change with
respect to the Company's interest rate exposures or its approach toward those
exposures. Further, the Company does not expect its interest rate exposures on
its borrowings to change in the near term.
The Company is also exposed to market risks with respect to the
unvested portion of its deferred compensation program. Participants in the
program may direct the investment of deferred compensation amounts into various
debt and equity investments. Such investments are classified as trading
securities and as such are carried on the Company's consolidated balance sheet
at fair value with changes in their fair values recognized each period in the
Company's consolidated statement of operations. Therefore, the Company is
exposed to changes in interest rates and the volatility of the stock and bond
markets.
Item 4. - Controls and Procedures
Within the 90-day period preceding the filing date of this report, an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures was carried out under the supervision and
with the participation of the Company's management, including the Chairman of
the Board and Chief Executive Officer and the Vice President and Chief Financial
Officer (the "Certifying Officers"). Based on that evaluation, the Certifying
Officers concluded that the Company's disclosure controls and procedures are
effective to bring to the attention of the Company's management the relevant
information necessary to permit an assessment of the need to disclose material
developments and risks pertaining to the Company's business in its periodic
filings with the Securities and Exchange Commission. There have been no
significant changes to the Company's internal controls or in other factors that
could significantly affect these controls subsequent to the date of the
evaluation.
10
Forward-Looking Information
Certain parts of this document include forward-looking statements
within the meaning of the federal securities laws that are subject to risks and
uncertainties. Factors that could cause the Company's actual results and
financial condition to differ from the Company's expectations include, but are
not limited to, a change in economic conditions that adversely affects the level
of demand for the Company's services, competitive market and pricing pressures,
the availability of qualified temporary workers, the ability of the Company to
manage growth through improved information systems and the training and
retention of new staff, and government regulation.
11
JOULE INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
During the first quarter of fiscal 2003, the Company issued an
aggregate of 1,260 shares of Common Stock from authorized but unissued
status as service awards to certain employees who had completed five
and twenty years of service with the Company during fiscal 2002. The
shares were not registered under the Securities Act of 1933 based on
the conclusion that the awards would not be events of sale within the
meaning of Section 2 (a) (3) of the Act.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on February 5, 2003
(b) The following directors were elected at the annual meeting with the
votes as indicated:
VOTES FOR VOTES WITHHELD
----------- --------------
Richard Barnitt 3,597,810 12,400
Robert W. Howard 3,598,110 12,100
Emanuel N. Logothetis 3,598,110 12,100
Nick M. Logothetis 3,598,110 12,100
Steven Logothetis 3,597,110 13,100
Andrew G. Spohn 3,597,810 12,400
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 99.1 - Certification pursuant to 18 USC Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Emanuel N. Logothetis
Exhibit 99.2 - Certification pursuant to 18 USC Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Bernard G. Clarkin
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
12
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 12, 2003 /s/ E.N. LOGOTHETIS
-----------------------------------------
E. N. Logothetis, Chairman and
Chief Executive Officer (Principal
Executive Officer)
February 12, 2003 /s/ BERNARD G. CLARKIN
-----------------------------------------
Bernard G. Clarkin, Vice President and
Chief Financial Officer (Principal
Financial Officer)
13
CERTIFICATIONS
I, Emanuel N. Logothetis, Principal Executive Officer of Joule, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Joule Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: February 12, 2003
/s/ EMANUEL N. LOGOTHETIS
-----------------------------------------
Emanuel N. Logothetis
Chairman of the Board and
Chief Executive Officer
CERTIFICATIONS
I, Bernard C. Clarkin, Principal Financial Officer of Joule, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Joule Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: February 12, 2003
/s/ BERNARD G. CLARKIN
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Bernard G. Clarkin
Vice President, Chief Financial Officer
and Secretary