FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
(Mark One)
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 ( X )                     THE SECURITIES EXCHANGE ACT OF 1934
                  For The Fiscal Year Ended September 30, 2001
                                       OR
 (      )                  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES 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                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

1245 U.S. Route 1 South, Edison, New Jersey                              08837
  (Address of principal executive offices)                            (Zip Code)

Registrant's telephone number, including area code: 732-548-5444

Securities  registered  pursuant to Section 12(b) of the Act: Common Stock,  par
value $.01 per share

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark whether the registrant (1) has filed all reports required
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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X ]

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
registrant,  based upon the closing  price of the Common  Stock on the  American
Stock Exchange on December 17, 2001, was approximately $ 2,332,000.

As  of  December  17,  2001,   there  were  3,682,000  shares  of  Common  Stock
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Certain  portions of the Company's  Annual Report to Stockholders for the fiscal
year ended September 30, 2001 filed with the Securities and Exchange  Commission
(the "Commission")  pursuant to Rule 14a-3 under the Securities  Exchange Act of
1934 (the "2001 Annual Report"), are incorporated by reference in Part II, Items
5-8, and Part IV of this Annual Report on Form 10-K.

Certain  portions  of  the  Company's  Proxy  Statement  to be  filed  with  the
Commission  pursuant to Rule 14a-6 under the Securities  Exchange Act of 1934 in
connection  with the Company's 2002 Annual Meeting of  Stockholders  (the "Proxy
Statement")  are  incorporated  by reference in Part III,  Items 10-13,  of this
Annual Report on Form 10-K.


<PAGE>

                                     PART I

ITEM 1. BUSINESS

General

     Joule Inc.  and its  subsidiaries  are engaged in the business of personnel
outsourcing,  as a supplier to industry of  staffing  service  personnel.  These
services focus on supplying  commercial  (skilled  office and light  industrial)
workers,  technical  professionals,  and  skilled  craft  industrial  plant  and
facility maintenance personnel to business and industry on a temporary basis.

     All employees on  assignment to the Company's  clients are on the Company's
payroll only during the periods of their  assignments.  By prior  understanding,
their  employment is continued after completion of an assignment only if another
suitable assignment is available. Historically,  virtually all revenue is billed
based on direct cost plus a mark-up to cover the Company's  overhead and profit.
At September 30, 2001,  approximately  2100 employees were on assignment to more
than 300 clients for periods ranging in duration from one day to several years.

     The Company was  incorporated  in New Jersey in 1967 as the  successor to a
business organized in 1965 and was reincorporated in Delaware on July 28, 1986.

Description of Services

     The Company supplies  commercial  (office and light industrial  workers) to
business and industry. The office workers are comprised of word processing, data
entry,  consumer  service and other office service  personnel.  Light industrial
workers  may  work in  warehouse,  packaging  or  light  assembly  environments.
Recruitment  and  assignment  of such  personnel is conducted  through  thirteen
offices in New Jersey and Florida.  The assignments last from one day to several
months or longer. Assignments are sometimes made to fill vacancies in a client's
work force caused by vacations, illnesses,  terminations or reassignments of the
client's  full-time  employees  and, in other cases to  supplement  the client's
normal work force to meet peak work loads,  handle  special  projects or provide
special  expertise.  Often  clients  elect to staff a portion  of their  service
requirements on a longer term basis with personnel  employed and provided by the
Company.  The client is charged an hourly rate that  comprises  the direct labor
rate of the personnel  provided,  associated  costs (such as fringe benefits and
payroll  taxes) and a mark-up to cover the  Company's  overhead  and profit.  In
1998, the Company  initiated a van  transportation  program to transport some of
its commercial  staffing  workers to job sites.  Employees who use this service,
which is voluntary,  pay a daily fee which currently  partially offsets the cost
of the program.  During 2001, the number of office and light industrial  workers
on assignment  per week averaged more than 1300,  and such services  contributed
approximately 32%, 35% and 38% of revenues in 2001, 2000 and 1999, respectively.

     The Company's technical employees include engineers,  designers, draftsmen,
information technology personnel,  scientists and lab technicians, who are often
furnished on a project basis.  Recruitment and assignment of these personnel are
conducted  through  three  offices in New Jersey,  Pennsylvania  and Alabama.  A
client that has an in-house engineering or other technical department, such as a
laboratory,  is able to supplement its permanent staff in a particular  skill or
for a  specific  project  by  utilizing  personnel  provided  by the  Company to
implement the client's  designs or program.  Generally,  several  candidates are
interviewed by the client before an assignment is made. The work is performed at
the client's facility under


                                       2
<PAGE>

the client's supervision.  The Company is neither an independent  consultant nor
professionally  liable.  The client is charged at an hourly rate that  comprises
the direct  labor rate of the  personnel  provided,  associated  costs  (such as
fringe benefits and payroll taxes) and a mark-up to cover the Company's overhead
and profit.  There are many technical  personnel who choose to work on temporary
assignments  rather than hold permanent  positions because of the opportunity to
work on diverse  projects and to choose times of employment.  While they are not
guaranteed steady employment,  are not eligible for promotion and receive lesser
fringe benefits than their full-time  counterparts,  such persons frequently are
compensated  at higher rates than  full-time,  permanent  personnel with similar
backgrounds  and  experience  and  have  a  greater   opportunity  for  overtime
compensation.  During 2001,  the number of technical  workers on assignment  per
week averaged 400, and such services contributed  approximately 33%, 31% and 30%
of revenues in 2001, 2000 and 1999, respectively.

     The Company  also  provides  skilled  craft  industrial  plant and facility
maintenance   labor   services   at   oil   refineries,   utilities,   chemical,
pharmaceutical and industrial  plants,  and office buildings.  These assignments
often  encompass  responsibility  for  performance  of  discrete  functions  for
customers on an ongoing basis.  Recruitment  and assignment of such personnel is
done from offices in New Jersey, Maryland,  Alabama, New York, and Illinois. The
Company provides the services of welders, electricians, millwrights, insulators,
pipefitters and other tradesmen as well as the necessary  supervisory  personnel
and  certain  materials  and  equipment.  The Company may furnish a base crew of
tradesmen  that is assigned to the client's  facility on a full-time  basis that
can be supplemented as needed to provide  additional  services  requested by the
client. The Company also undertakes specific projects,  such as oil and chemical
plant repairs, shutdowns,  dismantling,  and relocation and re-assembly of plant
equipment.  It also sends crews throughout the United States to install original
equipment for  manufacturers.  The Company  generally  charges clients at hourly
rates,  which  include a mark up for  overhead  and  profit,  for the  different
classifications of tradesmen and supervisory  personnel and on a cost-plus basis
for materials and equipment.  Travel  expenses are also billed to customers when
appropriate.  During 2001, the average number of such skilled industrial service
personnel on assignment per week to clients was approximately 400. Historically,
a substantial  percentage of industrial services contracts are renewed.  Skilled
industrial  services  contributed  approximately 35%, 34% and 32% of revenues in
fiscal 2001, 2000 and 1999 respectively.

     The use by clients of staffing services  personnel  provided by the Company
allows them to hire only such  permanent  employees  as are  required  for their
regular core work loads.  Clients are thus able to shift to the Company the cost
and  inconvenience   associated  with  the  employment  of  non-core  personnel,
including  advertising,   interviewing,  screening,  testing,  training,  fringe
benefits,  record keeping,  payroll taxes and insurance.  The Company is able to
absorb such costs more effectively than its clients because its employees,  once
recruited,  are generally  assigned to a succession of positions  with different
clients.


                                       3
<PAGE>

Customers and Marketing

     The majority of the Company's  business  orders each year were with clients
that it had done business for more than two years.

     The Company markets its services  primarily  through sales calls by its own
sales  personnel and through direct mail  solicitation,  participation  in trade
exhibitions and advertising. No customer accounted for more than 10% of revenues
in 2001, 2000 and 1999.

Personnel Assignment and Recruitment

     The Company  maintains a computerized data base of information on potential
employees. It uses optical scanning equipment, where appropriate, to enhance its
resume data base retrieval system. The data base contains  information on office
services and light  industrial  personnel,  engineering  and other technical and
scientific  personnel,  and skilled industrial  personnel,  classified by skill,
residence,  experience and current availability for assignment. When called upon
to fill an assignment,  the Company's recruiting  specialists match the client's
specifications  with  the  information  in the  data  base  on  these  potential
employees.  The ability to update,  expand and  rapidly  access the data base is
important to the Company's  success.  The Company's  branch offices have direct,
on-line  access to the data base.  Direct access is especially  important in the
office services and technical areas where immediate response to client orders is
required.  In  addition,  it is important in the  technical  services  operation
because of the diversity of skills involved.

     The Company recruits  personnel  through  advertisements in local media and
trade  journals,  at job  fairs,  and  through  referrals  by  current  and past
employees.  Personnel  listed in the Company's  data base  generally do not work
exclusively for the Company. Compensation and location of the assignment are the
principal  factors  considered by such  personnel  when choosing from  competing
assignments. The Company considers its pay scale to be competitive.

Competition

     The Company  faces  intense  competition  from a large  number of local and
regional firms as well as national firms.  The Company competes with these firms
for potential  employees as well as for clients.  Many of the regional firms and
all of the national  firms with which it competes are  substantially  larger and
possess substantially greater operating,  financial and personnel resources than
the Company.  The Company competes primarily on the basis of price,  quality and
reliability of service.


                                       4
<PAGE>

Employees

     At September  30, 2001,  the Company  employed  approximately  200 full and
part-time  permanent employees in its headquarters and branch offices other than
those on assignment to clients and had approximately 2100 persons on assignment.
The  Company  is  a  party  to   collective   bargaining   agreements   covering
approximately  225 employees  engaged in skilled craft  industrial  and facility
maintenance work. The Company considers its relationships  with its employees to
be satisfactory.

ITEM 2. PROPERTIES

     The  Company  leases  most  of  its  facilities.  The  Company's  corporate
headquarters are located in Edison, New Jersey and comprise  approximately 8,000
square feet.  The Company owns that  building as well as a building  adjacent to
its corporate  headquarters which serves as operational  headquarters for one of
the  Company's  divisions  and a building in  Gibbstown,  New Jersey  housing an
industrial   staffing   unit.   Nineteen   additional   facilities,   comprising
approximately 54,000 square feet of space, are leased at rentals and under terms
and conditions prevailing in the various locations. The Company's facilities are
appropriate and adequate for its current needs.

ITEM 3. LEGAL PROCEEDINGS

     In  the  opinion  of  management,  there  are  no  material  pending  legal
proceedings  to which the Company is a party or of which any of its  property is
the subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          Not Applicable.


                                       5
<PAGE>

Executive Officers of the Company

     The names,  ages and  positions  of all of the  executive  officers  of the
Company as of  December  17,  2001 are listed  below  along with their  business
experience  during the past five years.  Officers  are  elected  annually by the
Board of  Directors  and  serve  at the  pleasure  of the  Board.  There  are no
arrangements or understandings between any officer and any other person pursuant
to which the officer was selected. Emanuel N. Logothetis and John Logothetis are
second cousins.

     Emanuel  N.  Logothetis,  age 71,  founded  the  Company  in  1965  and was
President and Chief Executive Officer until August 10, 1987, when he was elected
Chairman of the Board. He was reelected President on August 3, 1988. In February
1999 he relinquished the Presidency but was reelected Chairman of the Board.

     John G. Wellman,  Jr., age 53, was elected  President  and Chief  Operating
Officer in February  1999.  He was elected  Executive  Vice  President and Chief
Operating Officer on May 6, 1998. He was appointed to the same positions when he
joined the Company in March 1998.  Prior to that he was Executive Vice President
of Oxford and  Associates,  Inc., a technical  staffing firm,  from 1986 through
March 1998.

     Bernard G. Clarkin, age 52, was elected Vice President in February 1994 and
Chief  Financial  Officer,  Treasurer,  and  Secretary in February  1990. He was
Controller,  Treasurer  and  Secretary of the Company from  February  1989 until
February 1990.

     John  Logothetis,  age 48, was elected a Vice President on July 1, 1986. He
had been General Manager of the Facilities Maintenance Operation since June 1984
and prior thereto had been Manager of  Supplemental  Services  since joining the
Company in December 1976.

     Stephen  Demanovich,  age 47, was elected a Vice  President in May 1997. He
had been General Manager of Joule Technical  Staffing since March 1995 and prior
thereto had been Recruiting Manager since joining the Company in February 1989.

     Joseph  Vendetti,  age 54, was elected a Vice  President in August 2000. He
had been a General Manager of Joule Technical Services since 1994. Prior to that
he was Regional Director for Joule Technical  Services since joining the Company
in 1990. Prior to his employment with Joule he was Manager of Technical Services
with Continental Can Company.

     John Porch,  age 49, was elected Vice President in August 2000. He had been
a General Manager of Joule Industrial Contractors since 1996. Mr. Porch has been
employed by Joule since 1980 holding a series of increasingly  more  responsible
positions.

     Judith  Bryant,  age 46, was appointed  Vice President in October 2000 when
she joined the Company to head its Commercial  Staffing  business unit. Prior to
that she worked for  Office  Specialists,  currently  a part of  Randstad  North
America (a large  staffing  company)  as a Market  Manager.  She  joined  Office
Specialists  in 1994.  Prior to that she was a sales  manager  for  Yankee  Book
Peddler, Inc.


                                       6
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The  information  required by this Item is incorporated by reference to the
information  under the caption  "Stock  Market  Information"  on the inside back
cover of the 2001 Annual Report.

ITEM 6. SELECTED FINANCIAL DATA

     The  information  required by this Item is incorporated by reference to the
"Selected Financial Information", included on the inside front cover of the 2001
Annual Report.

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The  information  required by this Item is incorporated by reference to the
information under the same caption on page 6 of the 2001 Annual Report.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     None

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  information  required by this Item is incorporated by reference to the
Consolidated  Financial Statements appearing on pages 7 to 12 of the 2001 Annual
Report.

ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

     Not applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information with respect to the directors of the Company required to be
included  pursuant to this Item 10 will be included under the caption  "Election
of Directors - Director  Compensation" in the Company's Proxy Statement,  and is
incorporated in this Item 10 by reference.  The information  with respect to the
executive  officers of the Company required to be included pursuant to this Item
10 is included under the caption  "Executive  Officers of the Company" in Part I
of this Annual Report on Form 10-K.


                                       7
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors,  and persons who own more than ten percent of the Common
Stock, to file reports of ownership and changes in ownership of the Common Stock
with the  Securities  and  Exchange  Commission  and to  provide  copies  to the
Company. Based upon a review of the copies of the forms furnished to the Company
and upon written  representations  from certain  reporting persons that no forms
were required,  the Company believes that all Section 16(a) filing  requirements
were complied with during fiscal 2001.

ITEM 11. EXECUTIVE COMPENSATION

     The  information  with  respect to  executive  compensation  required to be
included   pursuant  to  this  Item  11  will  be  included  under  the  caption
"Compensation of Executive Officers-Certain Transactions" in the Proxy Statement
and is incorporated in this Item 11 by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information  regarding  security ownership of certain beneficial owners
and management that is required to be included  pursuant to this Item 12 will be
included  under  the  captions  "Beneficial  Ownership  of  More  than 5% of the
Outstanding Common Stock" and "Beneficial  Ownership of Management" in the Proxy
Statement and is incorporated in this Item 12 by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  with  respect  to any  reportable  transaction,  business
relationship  or indebtedness  between the Company and the beneficial  owners of
more than 5% of the Common Stock,  the directors or nominees for director of the
Company,  the executive  officers of the Company or the members of the immediate
families of such  individuals  that is required to be included  pursuant to this
Item  13  will  be  included  under  the  caption   "Compensation  of  Executive
Officers-Certain  Transactions"  in the Proxy  Statement and is  incorporated in
this Item 13 by reference.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  Financial Statements

     The  following  Financial  Statements  of JOULE Inc. and  subsidiaries  and
     Report of Independent  Public  Accountants  are  incorporated in Part IV by
     reference to the 2001 Annual Report.

          Report of Independent Public Accountants with respect to the financial
          statements for the fiscal years, 2001, 2000 and 1999, respectively.

                                        8
<PAGE>

          Consolidated  Balance  Sheets  as of  September  30,  2001  and  2000,
          respectively.

          Consolidated  Statements  of Income for the Years Ended  September 30,
          2001, 2000 and 1999, respectively.

          Consolidated  Statements  of  Changes in  Stockholders  Equity for the
          Years Ended September 30, 2001, 2000 and 1999, respectively.

          Consolidated  Statements  of Changes in Cash Flows for the Years Ended
          September 30, 2001, 2000 and 1999, respectively.

          Notes to Consolidated Financial Statements.

The following  financial  statement schedules are included at the indicated page
in this  Annual  Report on Form  10-K and  incorporated  in this  Item  14(a) by
reference:

          Report of Independent Public Accountants as to Schedules...........F-1

          Financial Statement Schedules:

               VIII - Valuation and Qualifying Accounts......................F-2

               IX   - Short-term Borrowings..................................F-3

All  other  schedules  are  omitted  since  they  are  not  required  or are not
applicable  or since the  information  is furnished  elsewhere in the  financial
statements or notes thereto.

(b)  Reports on Form 8-K

     No  reports on Form 8-K were  filed  during the last  quarter of the period
     covered by this report.


                                        9
<PAGE>

(c)  Exhibits

     3.1  --  Certificate  of  Incorporation,   filed  as  Exhibit  3.1  to  the
              Company's  Registration  Statement on Form S-1 (File No.  33-7617)
              under the Securities Act of 1933, as amended (the "Form S-1"), and
              incorporated herein by reference.

     3.2  --  By-laws,  as  amended,  filed as  Exhibit  3.2 to the Form S-1 and
              incorporated herein by reference.

     4.1  --  Loan and  Security  Agreement,  dated  as of  February  20,  1991,
              between registrant and United Jersey Bank Central,  N.A., filed as
              Exhibit 4.1 to the  Company's  Annual  Report on Form 10-K for the
              year  ended  September  30,  1991  and   incorporated   herein  by
              reference.

     4.1a --  Third Modification and Extension Agreement, dated August 23, 1995,
              between  registrant and United Jersey Bank,  filed as Exhibit 4.1a
              to the  Company's  Annual  Report on Form 10-K for the year  ended
              September 30, 1995 and incorporated herein by reference.

     4.1b --  Fourth  Modification  and Extension  Agreement,  dated February 6,
              1996,  .........  between registrant and United Jersey Bank, filed
              as Exhibit 4.1b to the  Company's  Annual  Report on Form 10-K for
              the year  ended  September  30,  1996 and  incorporated  herein by
              reference.

     4.1c --  Fifth  Modification and Extension  Agreement,  dated May 31, 1996,
              between  registrant and United Jersey Bank,  filed as Exhibit 4.1c
              to the  Company's  Annual  Report on Form 10-K for the year  ended
              September 30, 1996 and incorporated herein by reference.

     4.1d --  Sixth  Modification and Extension  Agreement,  dated May 31, 1997,
              between  registrant and Summit Bank,  filed as Exhibit 4.1d to the
              Company's  Annual Report on Form 10-K for the year ended September
              30, 1997 and incorporated herein by reference.

     4.1e --  Seventh Modification and Extension Agreement,  dated May 31, 1998,
              between  registrant and Summit Bank,  filed as Exhibit 4.1e to the
              Company's  Annual Report on Form 10-K for the year ended September
              30, 1998 and incorporated herein by reference

     4.1f --  Eighth  Modification  and Extension  Agreement,  dated February 5,
              1999, between registrant and Summit Bank, filed as Exhibit 4.1f to
              the  Company's  Annual  Report  on Form  10-K for the  year  ended
              September 30, 1999 and incorporated herein by reference

     4.1g --  Ninth  Modification and Extension  Agreement,  dated May 10, 1999,
              between  registrant and Summit Bank,  filed as Exhibit 4.1g to the
              Company's  Annual Report on Form 10-K for the year ended September
              30, 1999 and incorporated herein by reference.


                                       10
<PAGE>

     4.1h --  Tenth  Modification  and Extension  Agreement,  dated November 15,
              1999, between registrant and Summit Bank, filed as Exhibit 4.1h to
              the  Company's  Annual  Report  on Form  10-K for the  year  ended
              September 30, 2000 and incorporated herein by reference.

     4.1i --  Letter  Amendment,  dated May 26,  2000,  between  registrant  and
              Summit Bank,  filed as Exhibit 4.1i to the Company's Annual Report
              on  Form  10-K  for  the  year  ended   September   30,  2000  and
              incorporated herein by reference.

     4.1j --  Letter  Amendment dated May 31, 2001 between  registrant and Fleet
              Bank.

     4.1k --  Thirteenth Amendment and Modification  Agreement,  dated September
              15, 2001, between Registrant and Fleet Bank.

     10.4*--  1991 Stock Option Plan,  filed as Exhibit  10.11 to the  Company's
              Annual  Report on Form 10-K for the year ended  September 30, 1991
              and incorporated herein by reference.

     10.5*--  2001 Stock Option Plan.

     10.6*--  Joule Inc. Deferred Compensation Plan.

     13   --  Annual  Report to  Stockholders  for the year ended  September 30,
              2001.

     21   --  List of Subsidiaries.

     23   --  Consent of Independent Public Accountants.




----------

     *    Compensatory Plan


                                       11

<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                   JOULE INC.

Dated:  December 24, 2001                  Emanuel N. Logothetis
                                           ----------------------
                                           Emanuel N. Logothetis,
                                           Chairman of the Board


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on December 24, 2001.


Emanuel N. Logothetis                      Bernard G. Clarkin
----------------------                     ----------------------
Emanuel N. Logothetis                      Bernard G. Clarkin
Chairman of the Board and                  Vice President and Chief Financial
Director (Principal Executive              Officer (Principal Financial Officer
                                           and Officer) and Accounting Officer)


Nick M. Logothetis
----------------------                     ----------------------
Nick M. Logothetis - Director              Steven Logothetis - Director


Richard Barnitt                            Andrew Spohn
----------------------                     ----------------------
Richard Barnitt- Director                  Andrew Spohn - Director


----------------------
Robert W. Howard - Director


                                       12
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Joule Inc.:

We have audited in accordance with auditing standards  generally accepted in the
United States, the financial  statements included in Joule Inc. and subsidiaries
annual report to  shareholders  incorporated by reference in this Form 10-K, and
have issued our report  thereon dated  November 9, 2001.  Our audit was made for
the  purpose of forming an  opinion on those  statements  taken as a whole.  The
schedules  listed in the index  above are the  responsibility  of the  Company's
management  and are presented for purposes of complying  with the Securities and
Exchange  Commission's rules and are not part of the basic financial  statements
and, in our opinion,  fairly state in all material  respects the financial  data
required to be set forth therein in relation to the basic  financial  statements
taken as a whole.


                                           ARTHUR ANDERSEN LLP



Roseland, New Jersey
November 9, 2001


                                       F-1
<PAGE>

                                                                   SCHEDULE VIII


                           JOULE INC. AND SUBSIDIARIES

                VALUATION AND QUALIFICATION ACCOUNTS AND RESERVES


<TABLE>
<CAPTION>
                           BALANCE        CHARGED TO     CHARGED                     BALANCE
                           BEGINNING      COSTS AND      TO OTHER                    END OF
DESCRIPTION                OF PERIOD      EXPENSES       ACCOUNTS     DEDUCTIONS     PERIOD
-----------                ---------      --------       --------     ----------     ------
<S>                        <C>            <C>            <C>          <C>            <C>
Allowance for
    doubtful accounts:

Years Ended:

  September 30, 1999       $267,000       $778,000         -----      $661,000       $384,000

  September 30, 2000       $384,000       $250,000         -----      $120,000       $514,000

  September 30, 2001       $514,000       $336,000         -----      $286,000       $564,000
</TABLE>


                                       F-2
<PAGE>

                                                                     SCHEDULE IX

                           JOULE INC AND SUBSIDIARIES

                              SHORT-TERM BORROWINGS

<TABLE>
<CAPTION>
                                                                            MAXIMUM        AVERAGE         WEIGHTED
                           CATEGORY OF                    WEIGHTED          AMOUNT OF      AMOUNT          AVERAGE
                           AGGREGATE                      AVERAGE AT        BORROWINGS     OUTSTANDING     INTEREST RATE
                           SHORT-TERM     BALANCE AT      INTEREST RATE     DURING THE     DURING THE      DURING THE
                           BORROWINGS     END OF YEAR     END OF YEAR       YEAR           YEAR*           YEAR*
                           ----------     -----------     -----------       ----           -----           -----
<S>                        <c>            <C>             <C>               <C>            <C>             <C>
YEARS ENDED

    SEPTEMBER 30, 1999     BANKS          $7,700,000      6.94%             $8,200,000     $4,833,000      6.82%

    SEPTEMBER 30, 2000     BANKS          $4,980,000      7.99%             $8,750,000     $6,985,000      7.87%

    SEPTEMBER 30, 2001     BANKS          $5,250,000      4.41%             $6,000,000     $5,179,000      6.89%
</TABLE>


     *Average amount  outstanding is based on daily averages.  Weighted  average
     interest rate during each year is calculated by dividing  interest  expense
     on short term borrowings by the average amount outstanding.


                                       F-3
<PAGE>

Exhibit
Number                                                                      Page
------                                                                      ----

               EXHIBIT INDEX
               Description of Exhibit
               ----------------------


3.1            Certificate of Incorporation, filed as Exhibit 3.1 to the       *
               Company's  Registration  Statement  on Form S-1 (File No.
               33-7617)  under the  Securities  Act of 1933,  as amended
               (the "Form S-1"), and incorporated herein by reference.

3.2            By-laws, as amended, filed as Exhibit 3.2 to the Form S-1       *
               and incorporated herein by reference.

4.1            Loan and  Security  Agreement,  dated as of February  20,       *
               1991,  between registrant and United Jersey Bank Central,
               N.A., filed as Exhibit 4.1 to the Company's Annual Report
               on Form 10-K for the year ended  September  30,  1991 and
               incorporated herein by reference.

4.1a           Third Modification and Extension Agreement,  dated August       *
               23,  1995,  between  registrant  and United  Jersey Bank,
               filed as Exhibit 4.1a to the  Company's  Annual Report on
               Form  10-K  for the year  ended  September  30,  1995 and
               incorporated herein by reference.

4.1b           Fourth  Modification  and  Extension   Agreement,   dated       *
               February 6, 1996,  between  registrant  and United Jersey
               Bank,  filed  as  Exhibit  4.1b to the  Company's  Annual
               Report on form 10-K for the year ended September 30, 1996
               and incorporated herein by reference.

4.1c           Fifth Modification and Extension Agreement, dated May 31,       *
               1996, between registrant and United Jersey Bank, filed as
               Exhibit 4.1c to the Company's  Annual Report on Form 10-K
               for the year ended  September  30, 1996 and  incorporated
               herein by reference.

4.1d           Sixth Modification and Extension Agreement, dated May 31,       *
               1997,  between  registrant  and  Summit  Bank,  filed  as
               Exhibit 4.1d to the Company's  Annual Report on Form 10-K
               for the year ended  September  30, 1997 and  incorporated
               herein by reference.


<PAGE>


4.1e           Seventh Modification and Extension  Agreement,  dated May       *
               31, 1998,  between  registrant and Summit Bank,  filed as
               Exhibit 4.1e to the Company's  Annual Report on Form 10-K
               for the year ended  September  30, 1998 and  incorporated
               herein by reference.

4.1f           Eighth  Modification  and  Extension   Agreement,   dated       *
               February 5, 1999,  between  registrant  and Summit  Bank,
               filed as Exhibit 4.1f to the  Company's  Annual Report on
               Form  10-K  for the year  ended  September  30,  1999 and
               incorporated herein by reference.

4.1g           Ninth Modification and Extension Agreement, dated May 10,       *
               1999,  between  registrant  and  Summit  Bank,  filed  as
               Exhibit 4.1g to the Company's  Annual Report on Form 10-K
               for the year ended  September  30, 1999 and  incorporated
               herein by reference.

4.1h           Tenth   Modification  and  Extension   Agreement,   dated       *
               November 15, 1999,  between  registrant  and Summit Bank,
               filed as Exhibit 4.1h to the  Company's  Annual Report on
               Form  10-K  for the year  ended  September  30,  2000 and
               incorporated herein by reference.

4.1i           Letter Amendment,  dated May 26, 2000, between registrant       *
               and Summit Bank,  filed as Exhibit 4.1i to the  Company's
               Annual  Report on Form 10-K for the year ended  September
               30, 2000 and incorporated herein by reference.

4.1j           Letter  Amendment  dated May 31, 2001 between  registrant      19
               and Fleet Bank.

4.1k           Thirteenth  Amendment and Modification  Agreement between      25
               registrant and Fleet Bank.

10.4**         1991 Stock  Option  Plan,  filed as Exhibit  10.11 to the       *
               Company's  Annual  Report on Form 10-K for the year ended
               September 30, 1991 and incorporated herein by reference.

10.5**         2001 Stock Option Plan                                         54

10.6**         Joule Inc. Deferred Compensation Plan                          61


<PAGE>


13             Annual  Report  to   Stockholders   for  the  year  ended      75
               September  30,  2001.

21             List of Subsidiaries                                           92

23             Consent of Independent Public Accountants                      94


               *    Incorporated by Reference

               **   Compensatory Plan