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 June 30, 1998

                                       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 _____

As of August 4, 1998, 3,670,000 shares of the Registrant's common stock were
outstanding.

<PAGE>


Part I - Financial Information
Item 1. Financial Statements

                           Joule Inc. and Subsidiaries
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                         June 30,     September 30,
              ASSETS                                       1998            1997
              ------                                   -----------     ------------
                                                       (Unaudited)
<S>                                                    <C>             <C>        
CURRENT ASSETS:
  Cash                                                 $   151,000     $   139,000
  Accounts receivable, less allowance
    for doubtful accounts of $285,000 and $200,000
    for June 30 and September 30, respectively           8,062,000       6,820,000
  Prepaid expenses and other current assets                453,000         146,000
                                                       -----------     -----------
        Total Current Assets                             8,666,000       7,105,000
PROPERTY AND EQUIPMENT, NET OF
  ACCUMULATED DEPRECIATION                               3,751,000       3,633,000

GOODWILL AND OTHER ASSETS                                   87,000         105,000
                                                       -----------     -----------
                                                       $12,504,000     $10,843,000
                                                       ===========     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
  Loans payable to bank                                $ 2,700,000     $ 1,295,000
  Accounts payable and accrued expenses                  1,165,000       1,472,000
  Accrued payroll and related taxes                      1,327,000       1,291,000
  Income taxes                                              31,000         168,000
  Current portion of long term debt                         25,000          25,000
                                                       -----------     -----------
        Total Current Liabilities                        5,248,000       4,251,000
LONG TERM DEBT                                             388,000         406,000
                                                       -----------     -----------
        Total Liabilities                                5,636,000       4,657,000
                                                       -----------     -----------

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 3,816,000
      shares                                                38,000          38,000
  Additional paid-in capital                             3,658,000       3,658,000
  Retained earnings                                      3,561,000       2,879,000
                                                       -----------     -----------
                                                         7,257,000       6,575,000
  LESS: Cost of 146,000 shares of common
        stock held in treasury                             389,000         389,000
                                                       -----------     -----------
        Total Stockholders' Equity                       6,868,000       6,186,000
                                                       -----------     -----------
                                                       $12,504,000     $10,843,000
                                                       ===========     ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        2

<PAGE>


                           Joule Inc. and Subsidiaries
                        Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                       Three Months Ended                 Nine Months Ended
                                                 -----------------------------      -----------------------------
                                                   June 30,         June 30,          June 30,         June 30,
                                                     1998             1997              1998             1997
                                                 ------------     ------------      ------------     ------------
                                                  (Unaudited)     (Unaudited)       (Unaudited)      (Unaudited)
<S>                                              <C>              <C>               <C>              <C>         
REVENUES                                         $ 14,392,000     $ 12,762,000      $ 40,342,000     $ 36,176,000
                                                 ------------     ------------      ------------     ------------

COSTS, EXPENSES AND OTHER:
  Cost of services                                 11,730,000       10,355,000        32,988,000       29,555,000
  Selling, general & administrative expenses        2,099,000        1,842,000         6,020,000        5,276,000
  Interest  expense                                    69,000           54,000           180,000          168,000
  Other                                                 4,000          (14,000)           18,000          (34,000)
                                                 ------------     ------------      ------------     ------------

INCOME BEFORE INCOME TAX PROVISION                    490,000          525,000         1,136,000        1,211,000

INCOME TAX PROVISION                                  196,000          210,000           454,000          484,000
                                                 ------------     ------------      ------------     ------------

NET INCOME                                       $    294,000     $    315,000      $    682,000     $    727,000
                                                 ============     ============      ============     ============

BASIC AND DILUTED EARNINGS PER SHARE             $       0.08     $       0.09      $       0.19     $       0.20
                                                 ============     ============      ============     ============

AVERAGE COMMON SHARES OUTSTANDING-BASIC             3,670,000        3,661,000         3,670,000        3,661,000
                                                 ============     ============      ============     ============

AVERAGE COMMON SHARES AND COMMON
  EQUIVALENTS OUTSTANDING-DILUTED                   3,673,000        3,663,000         3,673,000        3,663,000
                                                 ============     ============      ============     ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3

<PAGE>


                           Joule Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                        ----------------------------
                                                                          June 30,        June 30,
                                                                            1998            1997
                                                                        -----------      -----------
                                                                        (Unaudited)      (Unaudited)
<S>                                                                     <C>              <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                                            $   682,000      $   727,000
  Adjustments to reconcile net income to
    net cash flows provided by (used in) operating
    activities:
      Depreciation and amortization                                         405,000          344,000
      Provision for losses on accounts receivable                            84,000           71,000
      Changes in operating assets and liabilities:
        Accounts receivable                                              (1,326,000)         514,000
        Prepaid expenses and other assets                                  (310,000)         190,000
        Accounts payable and accrued expenses                              (307,000)      (1,152,000)
        Accrued payroll and related taxes                                    36,000           44,000
        Income taxes                                                       (137,000)          47,000
                                                                        -----------      -----------
          Net cash flows provided by (used in) operating activities        (873,000)         785,000
                                                                        -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of property and equipment                                   (502,000)        (176,000)
                                                                        -----------      -----------
          Net cash flows used in investing activities                      (502,000)        (176,000)
                                                                        -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase (decrease) in loans payable to bank                           1,405,000         (543,000)
   Payment of long term debt                                                (18,000)         (19,000)
                                                                        -----------      -----------
          Net cash flows provided by (used in) financing activities       1,387,000         (562,000)
                                                                        -----------      -----------
NET CHANGE IN CASH                                                           12,000           47,000

CASH, BEGINNING OF PERIOD                                                   139,000          175,000
                                                                        -----------      -----------
CASH, END OF PERIOD                                                     $   151,000      $   222,000
                                                                        ===========      ===========
SUPPLEMENTAL CASH FLOW INFORMATION:

  Interest paid                                                         $   174,000      $   172,000
                                                                        ===========      ===========

  Income taxes paid                                                     $   638,000      $   272,000
                                                                        ===========      ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4

<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 changes in cash flows for all
interim periods presented, have been made. The results of operations for interim
periods are not necessarily indicative of the operating results for the full
year.

Footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principals have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These consolidated financial statements should be read in
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.

(2) During the first quarter ended December 31, 1997, the Company adopted the
provisions of statement of Financial Accounting Standards No. 128, "Earnings per
share" (SFAS 128). The new standard requires the presentation of basic EPS and
diluted EPS. Basic EPS is calculated by dividing income available to common
shareholders by the weighted average number of shares of common stock
outstanding during the period. Diluted EPS is calculated by dividing income
available to common shareholders by the weighted average number of common shares
outstanding adjusted to reflect potentially dilutive securities. Previously
reported EPS amounts have been restated under the new standard.

                                       5

<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 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. Over 90% of revenue in each period is billed on a
direct cost plus markup basis. Revenue increased approximately 13% to $14.4
million for the three months ended June 30, 1998 from $12.8 million for the year
earlier period. Revenue for the first nine months of fiscal 1998 amounted to
$40.3 million, an increase of 12% or $4.2 million over the comparable nine month
period of 1997. Commercial staffing revenue for the three month period ended
June 30, 1998 decreased 4% to $5.3 million, compared to the same prior year
period while nine month revenues increased 4% over the prior year, to $14.4
million. This quarterly decline is not expected to recur in upcoming quarters.
Technical staffing revenue was $4.4 million in the current 1998 quarter, a 25%
increase over the 1997 quarterly revenue of $3.5 million, and rose 27% to $11.9
million as compared to the 1997 nine month period. Industrial staffing revenue
rose 25% to $4.7 million and 9% to $14.0 million for the 1998 three and nine
month periods. Cost of services amounted to 81.5% of revenue during the current
three months compared to 81.2% a year earlier due to the continuing but less
significant impact of employee van transportation costs, while for nine months
the cost of services as a percentage of revenue was virtually unchanged at
8l.8%. 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 $2.1 million and
$6.0 million for the three and nine months ended June 30, 1998 compared to $1.8
million and $5.3 million for the year earlier periods, and represented 14.6% and
14.9% of revenue in the 1998 periods, a slight increase over the comparable 1997
periods of 14.4% and 14.6% of revenue. Selling, general and administrative
expenses principally include staff employees' salaries and related costs,
advertising, professional fees, depreciation, provision for the allowance for
doubtful accounts and other costs related to maintaining the Company's branch
offices. These increases are principally due to higher staff employee related
expenses necessitated by current labor market conditions.

                                       6

<PAGE>


                           JOULE INC. AND SUBSIDIARIES

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

     Interest expense amounted to $69,000 and $180,000 for the 1998 three and
nine month periods compared to $54,000 and $168,000 for the respective prior
year periods, reflecting an increase in average borrowings to support increasing
business volume during 1998. The effective tax rate approximated 40% for all
periods presented. As a result of the above, net income for the 1998 nine month
period was $682,000 or $0.19 per share, basic and diluted, compared with net
income of $727,000 or $0.20 per share, basic and diluted, for the 1997 period;
for the 1998 three month period, net income was $294,000 or $0.08 per share,
basic and diluted, compared to $315,000 or $0.09 per share, basic and diluted.


Liquidity and Capital Resources

     Current assets at June 30, 1998 were $8,666,000 as compared to $7,105,000
at September 30, 1997 and current liabilities were $5,248,000 at June 30, 1998
compared to $4,251,000 as of September 30, 1997. 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 prime rate, less 25
basis points, with a LIBOR plus one hundred and fifty basis point option;
$2,700,000 was outstanding under this line as of June 30, 1998.

     The Company believes that internally generated funds and available
borrowings will provide sufficient cash flow to meet its requirements for the
next 12 months.

                                       7

<PAGE>


                           JOULE INC. AND SUBSIDIARIES
                           PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

 (a)      Exhibits: None
 (b)      Reports on Form 8-K
          No reports on Form 8-K have been filed during the quarter
          for which this report is filed.


                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.

                                        JOULE INC.
                                        (Registrant)

August 12, 1998
                                                   E.N. Logothetis
                                        ---------------------------------------
                                        E. N. Logothetis, Chairman
                                        (Principal Executive Officer)


August 12, 1998
                                                   Bernard G. Clarkin
                                        ---------------------------------------
                                        Bernard G. Clarkin, Vice President and
                                        Chief Financial Officer
                                        (Principal Financial Officer)

                                       8