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, 2004

                                       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.
             ------------------------------------------------------
             (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)


                                 (732) 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 [ ]

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 May 12, 2004, 3,683,650 shares of the Registrant's common stock were
outstanding.
<PAGE>
Part I - Financial Information

Item 1.  Financial Statements (unaudited)

<TABLE>
<CAPTION>
                                        Joule Inc. And Subsidiaries
                                        Consolidated Balance Sheets
                                                (Unaudited)

                                                                         March 31,           September 30,
                                                                           2004                  2003
                                                                       -----------           -------------

<S>                                                                    <C>                   <C>
ASSETS
------
CURRENT ASSETS:
  Cash                                                                 $   173,000           $   177,000
  Accounts receivable, less allowance
    for doubtful accounts of $304,000 at March 31
    and $393,000 at September 30                                         7,373,000             7,940,000
  Prepaid insurance                                                        765,000             1,214,000
  Prepaid expenses and other current assets                                525,000               606,000
                                                                       -----------           -----------
      Total Current Assets                                               8,836,000             9,937,000

PROPERTY AND EQUIPMENT, NET                                              3,370,000             3,675,000
GOODWILL                                                                 1,191,000             1,184,000
OTHER ASSETS                                                               609,000               501,000
                                                                       -----------           -----------
      Total Assets                                                     $14,006,000           $15,297,000
                                                                       ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
  Loans payable to bank                                                $ 1,915,000           $ 3,150,000
  Accounts payable and accrued expenses                                  1,292,000             1,289,000
  Accrued payroll and related taxes                                      1,721,000             1,935,000
                                                                       -----------           -----------
      Total Current Liabilities                                          4,928,000             6,374,000
CAPITAL LEASE OBLIGATIONS                                                   29,000                85,000
DEFERRED COMPENSATION                                                      228,000               162,000
                                                                       -----------           -----------
      Total Liabilities                                                  5,185,000             6,621,000
                                                                       -----------           -----------

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             3,674,000
  Retained earnings                                                      5,491,000             5,346,000
                                                                       -----------           -----------
                                                                         9,203,000             9,058,000

  LESS: Cost of 144,000 shares of common stock held in treasury            382,000               382,000
                                                                       -----------           -----------
          Total Stockholders' Equity                                     8,821,000             8,676,000
                                                                       -----------           -----------
            Total Liabilities and Stockholders' Equity                 $14,006,000           $15,297,000
                                                                       ===========           ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        2
<PAGE>
<TABLE>
<CAPTION>
                                                 Joule Inc. And Subsidiaries
                                            Consolidated Statements of Operations
                                                         (Unaudited)


                                                        Three Months Ended                      Six Months Ended
                                                  -------------------------------        -------------------------------
                                                    March 31,          March 31,           March 31,          March 31,
                                                      2004               2003                2004               2003
                                                  ------------       ------------        ------------       ------------

<S>                                               <C>                <C>                 <C>                <C>
REVENUES                                          $ 17,441,000       $ 16,509,000        $ 34,457,000       $ 33,526,000
                                                  ------------       ------------        ------------       ------------

COSTS, EXPENSES AND OTHER:
  Cost of services                                  14,147,000         13,537,000          27,670,000         27,321,000
  Selling, general & administrative expenses         3,124,000          3,478,000           6,432,000          6,864,000
  Interest expense                                      36,000             27,000              81,000             62,000
                                                  ------------       ------------        ------------       ------------

INCOME (LOSS) BEFORE INCOME TAXES                      134,000           (533,000)            274,000           (721,000)

INCOME TAX PROVISION (BENEFIT)                          48,000           (209,000)            129,000           (282,000)
                                                  ------------       ------------        ------------       ------------

NET INCOME (LOSS)                                 $     86,000       $   (324,000)       $    145,000       $   (439,000)
                                                  ============       ============        ============       ============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE       $       0.02       $      (0.09)       $       0.04       $      (0.12)
                                                  ============       ============        ============       ============

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING-BASIC                                    3,684,000          3,684,000           3,684,000          3,684,000
                                                  ============       ============        ============       ============

WEIGHTED AVERAGE COMMON SHARES AND
COMMON EQUIVALENTS OUTSTANDING - DILUTED             3,694,000          3,684,000           3,694,000          3,684,000
                                                  ============       ============        ============       ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>
                                  Joule Inc. And Subsidiaries
                             Consolidated Statements of Cash Flows
                                          (Unaudited)

                                                                          Six Months Ended
                                                                     --------------------------
                                                                      March 31,      March 31,
                                                                        2004           2003
                                                                     -----------    -----------

<S>                                                                  <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                  $   145,000    $  (439,000)
  Adjustments to reconcile net income (loss) to
    net cash flows provided by operating
    activities:
      Depreciation and amortization                                      421,000        458,000
      Provision for losses on accounts receivable                        (70,000)            --
      Writeoffs of property and equipment                                 12,000         54,000
      Gain on sale of property and equipment                              (5,000)            --

      Changes in operating assets and liabilities:
        Accounts receivable                                              637,000      1,139,000
        Prepaid expenses and other assets                                440,000       (275,000)
        Accounts payable and accrued expenses                              3,000        (99,000)
        Accrued payroll and related taxes                               (214,000)      (320,000)
        Deferred compensation                                             66,000         33,000
                                                                     -----------    -----------
          Net cash flows provided by operating activities              1,435,000        551,000
                                                                     -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of property and equipment                                (114,000)      (284,000)
  Purchase of marketable securities for deferred compensation plan       (36,000)       (29,000)
  Disposal of property and equipment                                       9,000             --
  Payment for business acquired                                           (7,000)       (43,000)
                                                                     -----------    -----------
    Net cash flows used in investing activities                         (148,000)      (356,000)
                                                                     -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Decrease in loans payable to bank                                   (1,235,000)      (130,000)
  Repayment of obligations under capital leases                          (56,000)       (55,000)
                                                                     -----------    -----------
    Net cash flows used in financing activities                       (1,291,000)      (185,000)
                                                                     -----------    -----------

NET CHANGE IN CASH                                                        (4,000)        10,000

CASH, BEGINNING OF PERIOD                                                177,000        174,000
                                                                     -----------    -----------
CASH, END OF PERIOD                                                  $   173,000    $   184,000
                                                                     ===========    ===========

SUPPLEMENTAL CASH FLOW INFORMATION
         Interest paid                                               $    72,000    $    64,000
                                                                     ===========    ===========
         Income taxes paid                                           $    15,000    $    24,000
                                                                     ===========    ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTMENT AND FINANCING ACTIVITIES:
         Capitalized vehicle leases                                  $        --    $   (16,000)
                                                                     ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        4
<PAGE>

                              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 consolidated
financial statements are unaudited. Management believes all adjustments,
consisting only of normal and recurring adjustments, necessary to present fairly
the consolidated 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 the consolidated financial
statements have been omitted in accordance with accounting principles generally
accepted in the United States of America for interim financial statements and
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 for the most recent fiscal year.

(2)      At March 31, 2004, the Company has two stock-based employee
compensation plans, which are described more fully in Note 5 to the Company's
consolidated financial statements included in Form 10-K for the fiscal year
ended September 30, 2003. The Company accounts for those plans under the
recognition and measurement principles of APB Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. No stock-based employee
and director compensation cost is reflected in net income (loss) as all options
granted under those plans had an exercise price equal to the fair value of the
underlying common stock on the date of grant. The following table illustrates
the effect on net income (loss) and income (loss) per share as if the Company
had applied the fair value recognition provisions of SFAS No. 123, "Accounting
for Stock-Based Compensation", to stock-based employee compensation.

<TABLE>
<CAPTION>
                                            Three Months Ended                   Six Months Ended
                                                 March 31,                          March 31,
                                        ---------------------------         --------------------------
                                            2004            2003              2004               2003
                                        ----------        ---------         ---------        ---------

<S>                                     <C>               <C>               <C>              <C>
Net income (loss) as reported...        $   86,000        $(324,000)        $ 145,000        $(439,000)
Deduct:  Total stock-based
  employee compensation expense
  determined under fair value
  based method for all awards,
  net of related tax effects....            (1,000)          (2,000)           (2,000)          (5,000)
                                        ----------        ---------         ---------        ---------
Pro forma net income (loss).....        $   85,000        $(326,000)        $ 143,000        $(444,000)
                                        ==========        =========         =========        =========

Income (loss) per share:
  Basic - as reported...........        $     0.02        $   (0.09)        $    0.04        $   (0.12)
                                        ==========        =========         =========        =========
  Basic - pro forma.............        $     0.02        $   (0.09)        $    0.04        $   (0.12)
                                        ==========        =========         =========        =========

  Diluted - as reported.........        $     0.02        $   (0.09)        $    0.04        $   (0.12)
                                        ==========        =========         =========        =========
  Diluted - pro forma...........        $     0.02        $   (0.09)        $    0.04        $   (0.12)
                                        ==========        =========         =========        =========
</TABLE>

                                       5
<PAGE>
(3)      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) Industrial Staffing, and (3) Technical Staffing.

         Information concerning operations by operating segment is as follows
(in 000's):

<TABLE>
<CAPTION>
                                                Three Months Ended                   Six Months Ended
                                                    March 31,                           March 31,
                                            --------------------------          --------------------------
                                              2004              2003              2004             2003
                                            --------          --------          --------         ---------

<S>                                         <C>               <C>               <C>              <C>
Revenues
  Commercial........................        $  4,963          $  4,076          $ 10,061         $   8,945
  Industrial........................           5,202             5,548            10,131            11,241
  Technical.........................           7,276             6,885            14,265            13,340
                                            --------         ---------          --------         ---------
                                            $ 17,441          $ 16,509          $ 34,457         $  33,526
                                            --------         ---------          --------         ---------

Income (Loss) Before Income Taxes
  Commercial........................        $    251          $    (19)         $    555                96
  Industrial........................             201                86               510               231
  Technical.........................             636               439             1,416             1,034
  Corporate (unallocated,
    including interest).............            (954)           (1,039)           (2,207)           (2,082)
                                            --------         ---------          --------         ---------
                                            $    134         $    (533)         $    274         $    (721)
                                            --------         ---------          --------         ---------
</TABLE>

(4)      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 consolidated financial
condition, results of operations or liquidity of the Company.

(5)      Going Private Proposal and Subsequent Events:

         On August 21, 2003, the Company announced that it had received a
non-binding proposal from a purchaser group (the "JAC Group") consisting of
Emanuel N. Logothetis, the founder, Chairman of the Board and Chief Executive
Officer of the Company, members of his immediate family and John G. Wellman,
Jr., President and Chief Operating Officer of the Company, to acquire all of the
outstanding shares of the Company's common stock not already owned by the JAC
Group.

         A Special Committee, comprised of the three independent members of the
Company's Board of Directors, was formed to evaluate and negotiate the going
private proposal. Following negotiations with the Special Committee, on November
21, 2003, JAC Acquisition Company, Inc. ("JAC"), a corporation formed by the JAC
Group, commenced a tender offer (the "Tender Offer") for all of the outstanding
common stock of the Company not owned by the JAC Group at $1.52 per share. The
Tender Offer was scheduled to expire at 12:00, midnight, Eastern Standard Time,
on December 19, 2003. On December 22, 2003, the JAC Group announced that it had
extended the expiration of the Tender Offer to 5:00 p.m., Eastern Standard Time,
on January 15, 2004, unless further extended. At December 19, 2003,
approximately 350,000 shares of common stock of the Company had been tendered
and not withdrawn.

         On January 16, 2004, the JAC Group announced that the number of shares
tendered pursuant to its offer to purchase all of the outstanding common stock
of the Company not owned by the JAC Group was not sufficient to satisfy the
non-waivable minimum tender condition of the tender offer and that the tender
offer had been withdrawn. The JAC Group also announced that it had made an
alternative going private proposal to the Board of Directors of the Company for
a merger of JAC with Joule pursuant to which stockholders of Joule (other than
the JAC Group and stockholders who properly perfect appraisal rights under
Delaware law) would receive $1.54, in cash, for each outstanding share of Joule

                                       6
<PAGE>

common stock owned by them. The Board of Directors of Joule reconstituted the
Special Committee of its Board of Directors, consisting of the three independent
directors, to evaluate the merger proposal. The Special Committee sought further
advice from the independent financial advisor and independent legal counsel
previously retained in connection with the original going private proposal.

         On March 19, 2004, Joule Inc. announced that it had entered into an
Agreement and Plan of Merger with JAC and that the merger consideration had been
increased to $1.70 per share following discussions between members of the
special committee and the JAC group. In connection with both the Tender Offer
and the merger plan, the Company incurred costs of approximately $153,000
through March 31, 2004, including $8,000 and $103,000 in the three and six
months ended March 31, 2004, related to fees incurred by the Special Committee
to analyze the JAC Group's offers, which are included in selling, general and
administrative expenses.

         The proposed merger has been approved by the Board of Directors, with
the directors who are members of the JAC Group abstaining, and will require
approval by the holders of a majority of the outstanding shares of Joule common
stock, which will be obtained by the written consent of the members of the JAC
Group.

         If the merger is consummated, JAC will merge with and into Joule, with
Joule as the surviving corporation. Each share of Joule common stock, other than
shares of common stock held by the JAC Group, which will be contributed to JAC
immediately prior to the Merger in exchange for shares of JAC common stock, and
shares of common stock held by stockholders who perfect appraisal rights under
Delaware law, will be converted into the right to receive the merger
consideration of $1.70 per share in cash, without interest. The common stock of
Joule will cease to be listed on the American Stock Exchange, Joule will cease
to file periodic reports with the Securities and Exchange Commission and Joule
will be a privately-held company owned solely by the members of the JAC Group.

                                       7
<PAGE>

                           JOULE INC. AND SUBSIDIARIES


Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations


Executive Level Overview

         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 graphic
design/marketing) personnel, and industrial (skilled craft, industrial plant and
facility maintenance) labor. Substantially all revenue is billed on a direct
cost plus markup basis. The Company also recognizes revenues under fixed price
contracts and for permanent placement services. The Company desegregates its
operations into three segments for internal reporting and management purposes -
Commercial, Industrial, and Technical.

Results of Operations

         Revenue increased 5.6% to $17.4 million for the three months ended
March 31, 2004 compared to $16.5 million for the year earlier period. Revenue
for the first six months of fiscal 2004 increased 2.8% to $34.5 million from
$33.5 million for the comparable six-month period of 2003. Technical staffing
revenue increased 6% to $7.3 million and 7% to $14.3 million for the respective
three and six-month periods ended March 31, 2004. These increases related
primarily to the continuing strength of its scientific business that places
personnel with pharmaceutical, bio-tech, chemical, and consumer products
clients, as well as the acquisition in January 2003 of a staffing firm which
places marketing and creative personnel. Commercial staffing revenue increased
22% to $5.0 million and 12% to $10.1 million for the respective three and
six-month periods ended March 31, 2004 as general demand for these services
improved over prior year periods. Industrial staffing revenue decreased 6% to
$5.2 million for the three-month period ended March 31, 2004 compared to the
2003 similar period. For the six-month period ended March 31, 2004, Industrial
Staffing revenue declined 10% to $10.1 million compared to the year earlier
period. These declines were due to the uneven economic recovery, which
negatively impacted demand for the Company's industrial personnel.

         Cost of services were 81.1% of revenue in the current quarter compared
to 82.0% for the prior year three-month period. For the six-month period cost of
services were 80.3% of revenues in 2004 compared to 81.5% in the same prior year
period. 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. The improvements in
cost of services as a percentage of revenue related to more permanent placement
fees and modest reductions in various costs of services in 2004 compared to the
prior periods.

         Selling, general and administrative expenses were $3.1 million and $6.4
million for the three and six months ended March 31, 2004, respectively,
compared to $3.5 million and $6.9 million for the year earlier periods, and
represented 17.9% and 18.7% of revenue in the 2004 respective periods, a
decrease from the comparable 2003 periods of 21.1% and 20.5% of revenue,
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 Company has
reduced selling, general and administrative expenses in the 2004 periods through
a decrease in staff payroll and related expenses, some branch closures, and an
overall decrease in other costs related to the Company's branch offices across
all segments. The Company continues to monitor these expenses and expects that

                                       8
<PAGE>

such cost controls will further benefit future periods. Partially offsetting
this decrease in the 2004 periods, the Company incurred fees of approximately
$8,000 and $103,000 in the 2004 quarter and six-month periods, respectively, for
services performed by the Special Committee and its advisors relating to the
going private proposal.

         Interest expense increased $9,000 and $19,000 for the 2004 three and
six-month periods, respectively, compared to the respective prior year periods,
reflecting higher interest rates associated with the new three-year loan
agreement. After giving effect to nondeductible costs associated with the going
private proposal, partially offset by the utilization of certain tax credits,
the effective tax rates for the three and six month periods ending March 31,
2004 were 36% and 47%, respectively; for 2003 the effective tax rate benefits
were 39% in the same periods ending March 31, 2003. As a result of the above,
the net income for the 2004 three-month period was $86,000 or $0.02 per basic
and diluted share, compared with the net loss of $324,000 or $0.09 per basic and
diluted share, for the 2003 period; for the 2004 six-month period, the net
income was $145,000 or $0.04 per basic and diluted share, compared with the net
loss of $439,000 or $0.12 per basic and diluted share, for the 2003 period.

Liquidity and Capital Resources

         Current assets at March 31, 2004 were $8,836,000 compared to current
assets of $9,937,000 at September 30, 2003 and current liabilities at March 31,
2004 were $4,928,000 compared to $6,374,000 as of September 30, 2003. The
decrease in current assets relates to a $656,000 reduction in gross accounts
receivable due to the continuing emphasis on credit and collections; a $449,000
decrease in prepaid insurance related to the timing of insurance renewals and an
$81,000 decrease in prepaid expense and other current assets. The decrease in
current liabilities is principally the result of a $1,235,000 decrease in bank
borrowings, and a $214,000 decrease in accrued payroll and related taxes due to
extra days payroll accrual at September 30, 2003.

         Due to the nature of its business, the Company's capital expenditures
are relatively modest and amounted to $114,000 for the six months ended March
31, 2004. 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 three-year loan agreement in
the form of a line of credit of $7,500,000 that bears interest at LIBOR plus two
and three-quarter percent with a prime rate plus one-half percent option. The
Company used its bank line of credit to obtain a $1,000,000 letter of credit in
favor of its worker compensation insurance carrier as a part of its insurance
renewal in 2003. Borrowings are collateralized principally by accounts
receivable. In addition to the letter of credit, $1,915,000 was outstanding
under this line as of March 31, 2004. The Company believes that internally
generated funds and available borrowings will provide sufficient cash flow to
meet its requirements for at least the next 12 months.

                                       9
<PAGE>
The following is a table that presents the Company's contractual obligations and
commercial commitments as of March 31, 2004:

<TABLE>
<CAPTION>
                                                            Payments Due by Fiscal Year
                                                    -------------------------------------------
                                                                                                    2006 and
                                                        Total            2004*         2005        Thereafter
                                                    -------------    ------------   -----------   -----------

<S>                                                 <C>              <C>            <C>           <C>
Loan payable to bank.........................       $   1,915,000    $  1,915,000   $        --   $        --
Capital lease obligations including interest.             145,000          60,000        67,000        18,000
Operating leases.............................             250,000         120,000       128,000         2,000
                                                    -------------    ------------   -----------   -----------
Total contractual cash obligations...........       $   2,310,000    $  2,095,000   $   195,000   $    20,000
                                                    =============    ============   ===========   ===========
</TABLE>

* Represents contractual cash obligations for the six months ended September 30,
2004.

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, 2003, the Company believes the following accounting policies to be
critical:

         Revenue Recognition - 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
graphic design/marketing) personnel, and industrial (skilled craft, industrial
plant and facility maintenance) labor. Substantially all revenue is billed on a
direct cost plus markup basis. In addition, the Company recognizes revenues
under fixed price contracts and permanent placement services. Revenues are
recorded when services are rendered.

         Long-Lived Assets -The Company reviews amortizable long-lived assets
for impairment whenever events or changes in business circumstances occur that
indicate the carrying amount of the assets may not be recovered. The Company
assesses the recoverability of long-lived assets held and to be used based on
undiscounted cash flows. In accordance with Statement of Financial Accounting
Standards (SFAS) No. 142, goodwill is not amortized but is tested at the segment
level 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.

         Stock Options - At March 31, 2004, the Company has two stock-based
employee compensation plans, which are described more fully in Note 5 to the
Company's consolidated financial statements in Form 10-K for the fiscal year
ended September 30, 2003.

         The Company applies Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for the Company's stock options.
Accordingly, compensation expense is recorded on the date of grant of an option
to an employee or member of the Board of Directors only if the fair market value
of the underlying stock at the time of grant exceeds the exercise price. No
options have been granted with an exercise price less than the fair market value
of the Company's common stock at the date of grant. Had the Company elected to
account for its stock options using SFAS No. 123, compensation expense would
have been recognized on options granted based on their fair value. 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 compensation expense disclosed.

                                       10
<PAGE>

         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
reported amount of assets and liabilities and disclosures of contingent assets
and liabilities as of the date of the consolidated financial statements and the
reported revenues and expenses during the reporting period. 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 $6,000 and $7,000 for the six months ended March 31, 2004 and
2003, respectively. For the six months ended March 31, 2004 and March 31, 2003,
the Company provided temporary office services to Symphony Suites, a company
owned by Nick M. Logothetis, a director and significant shareholder. Billing
rates are comparable to those used for other customers; amounts charged for the
three and six months ended March 31, 2004 were $88,000 and $180,000,
respectively; such charges for the three and six months ended March 31, 2003
were $105,000 and $197,000; $56,000 and $85,000 was outstanding at March 31,
2004 and September 30, 2003, respectively.

         The Company rented a facility from E.N. Logothetis, Chairman and Chief
Executive Officer and a significant stockholder for approximately $8,000 for the
six months ended March 31, 2004 and March 31, 2003. The Company's rental
agreement with the stockholder is on a month-to-month basis.

         The Company's Board of Directors has approved the transactions outlined
above. Any substantial change in the terms of any such transactions and any
additional transactions with affiliates of the Company will be submitted to the
Board for approval.


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. The
fair value of the loans payable to bank as of March 31, 2004 approximates its
carrying value. There has been no change with respect to the Company's interest
rate exposures or its approach toward those exposures since September 30, 2003.
The Company does not expect its interest rate exposures on its borrowings to
change significantly in the near term. A 100 basis point (1.0%) increase in
interest rates on the Company's loan payable to bank would have an immaterial
impact on the Company's financial position or results of operations.

         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 date of this report, an
evaluation of the effectiveness of the Company's disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the

                                       11
<PAGE>

Exchange Act) 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, on a timely basis, 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.

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.

                                       12
<PAGE>

                           JOULE INC. AND SUBSIDIARIES
                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

         Exhibit 31.1 - Certification of Chief Executive Officer pursuant to
         Rule 13a-14(a) (Section 302 Certification), as adopted pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

         Exhibit 31.2 - Certification of Chief Financial Officer pursuant to
         Rule 13a-14(a) (Section 302 Certification), as adopted pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

         Exhibit 32.1 - Certification pursuant to 18 U.S.C. Section 1350, as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
         Principal Executive Officer

         Exhibit 32.2 - Certification pursuant to 18 U.S.C. Section 1350, as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
         Principal Financial Officer

(b)      Reports on Form 8-K

         Form 8-K dated February 10, 2004 with respect to the issuance of the
         press release for the first quarter ended December 31, 2003 (Item 12).

         Form 8-K dated March 22, 2004 with respect to the agreement and plan of
         merger dated March 19, 2004 and the related press release dated March
         19, 2004 (Items 5 and 7).

                                       13
<PAGE>

                                   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, 2004              /s/ E.N. LOGOTHETIS
                          ------------------------------------------------------
                          E. N. Logothetis, Chairman and Chief Executive Officer
                          (Principal Executive Officer)


May 12, 2004              /s/ BERNARD G. CLARKIN
                          ------------------------------------------------------
                          Bernard G. Clarkin, Vice President and
                          Chief Financial Officer (Principal Financial Officer)

                                       14
<PAGE>

                                  EXHIBIT INDEX


31.1  -  Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
         (Section 302 Certification), as adopted pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

31.2  -  Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
         (Section 302 Certification), as adopted pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

32.1  -  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002 - Principal Executive
         Officer

32.2  -  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002 - Principal Financial
         Officer