SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X. QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2004
__ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 333-60608
JANEL WORLD TRADE, LTD.
(Exact name of registrant as specified in its charter)
NEVADA 86-1005291
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
150-14 132nd Avenue, Jamaica, NY 11434
(Address of principal executive offices) (Zip Code)
(718) 527-3800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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 12-2 of the Exchange Act). Yes__ No X
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 16,843,000
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
(a) Janel's unaudited, interim financial statements for its third fiscal
quarter (the three and nine months ended June 30, 2004) have been set forth
below. Management's discussion and analysis of the company's financial condition
and the results of operations for the third quarter and nine months will be
found at Item 2, following the financial statements.
2
JANEL WORLD TRADE LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2004 SEPTEMBER 30, 2003
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash $1,200,233 $1,060,406
Accounts receivable, net of allowance for doubtful
accounts of $42,038 at June 30, 2004 and
$30,000 at September 30, 2003 4,434,271 4,307,822
Marketable securities 47,562 41,093
Loans receivable - officers 163,325 158,332
- other 20,023 18,479
Prepaid expenses and sundry current assets 104,026 57,844
--------------- --------------
TOTAL CURRENT ASSETS 5,969,440 5,643,976
PROPERTY AND EQUIPMENT, NET 125,081 102,930
SECURITY DEPOSITS 50,286 51,354
--------------- ---------------
TOTAL ASSETS $6,144,807 $5,798,260
=============== ===============
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Note payable - bank $ 800,000 $800,000
Accounts payable 2,466,415 2,273,345
Accrued expenses and taxes payable 77,365 108,640
Current portion of long-term debt 8,077 3,840
--------------- ---------------
TOTAL CURRENT LIABILITIES 3,351,857 3,185,825
--------------- ---------------
OTHER LIABILITIES:
Deferred compensation 78,568 78,568
Long-term debt 23,677 -
--------------- ---------------
TOTAL OTHER LIABILITIES 102,245 78,568
--------------- ---------------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value, 225,000,000 shares authorized,
16,843,000 shares issued and outstanding
at June 30, 2004 and September 30, 2003 16,843 16,843
Additional paid-in capital 498,863 498,863
Retained earnings 2,174,999 2,018,161
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 2,690,705 2,533,867
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,144,807 $5,798,260
=============== ===============
See notes to consolidated financial statements
3
JANEL WORLD TRADE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
NINE MONTHS ENDED THREE MONTHS ENDED
JUNE 30 JUNE 30
2004 2003 2004 2003
---- ---- ---- ----
REVENUE:
Forwarding revenue $50,205,032 $40,529,477 $17,152,686 $14,949,933
Interest and dividends 10,865 17,189 3,381 2,930
---------------- ---------------- ----------------- -----------------
TOTAL REVENUE 50,215,897 40,546,666 17,156,067 14,952,863
---------------- ---------------- ----------------- -----------------
COSTS AND EXPENSES:
Forwarding expenses 45,168,259 35,964,641 15,420,755 13,371,161
Selling, general and administrative 4,745,535 4,285,554 1,604,977 1,474,782
Interest 32,981 13,761 10,694 3,601
---------------- ---------------- ----------------- -----------------
TOTAL COSTS AND EXPENSES 49,946,775 40,263,956 17,036,426 14,849,544
---------------- ---------------- ----------------- -----------------
INCOME BEFORE INCOME TAXES 269,122 282,710 119,641 103,319
Income taxes 118,400 113,000 52,900 41,000
---------------- ---------------- ----------------- -----------------
NET INCOME $ 150,722 $ 169,710 $ 66,741 $ 62,319
================ ================ ================= =================
OTHER COMPREHENSIVE INCOME,
NET OF TAX:
Unrealized gain from available - for - sale
securities $ 6,116 $ 5,181 $ 1,194 $ 5,617
================ ================ ================= =================
Basic and diluted earnings per share $ .00895 $ .01008 $ .00396 $ .00370
================ ================ ================= =================
Weighted number of shares outstanding 16,843,000 16,838,231 16,843,000 16,843,000
================ ================ ================= =================
See notes to consolidated financial statements
4
JANEL WORLD TRADE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED JUNE 30,
2004 2003
---- ----
OPERATING ACTIVITIES:
Net income $ 150,722 $ 169,710
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Stock issued for services - 15,609
Depreciation and amortization 42,768 39,618
Changes in operating assets and liabilities:
Accounts receivable (126,449) (737,496)
Prepaid expenses and sundry current assets (46,182) (39,637)
Security deposits 1,068 (4,176)
Accounts payable and accrued expenses 161,795 136,719
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 183,722 (419,653)
--------- ---------
INVESTING ACTIVITIES:
Acquisition of property and equipment, net of dispositions (64,919) (49,443)
Purchase of marketable securities (353) (461)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (65,272) (49,904)
--------- ---------
FINANCING ACTIVITIES:
Increase in loans receivable (6,537) (26,264)
Proceeds from sale of common stock - 18,010
Increase (decrease) in long-term debt, net 27,914 (6,919)
Bank borrowings - 500,000
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 21,377 484,827
--------- ---------
INCREASE IN CASH 139,827 15,270
--------- ---------
CASH - BEGINNING OF PERIOD 1,060,406 1,198,941
--------- ---------
CASH - END OF PERIOD $1,200,233 $1,214,211
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for:
Interest $ 32,981 $ 13,761
Income taxes $169,817 $ 142,472
Non-cash investing activities:
Unrealized gain on marketable securities $ 6,116 $ 5,181
See notes to consolidated financial statements
5
JANEL WORLD TRADE LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(Unaudited)
1 BASIS OF PRESENTATION
The attached consolidated financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. As a
result, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The Company believes that the
disclosures made are adequate to make the information presented not misleading.
The consolidated financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results for the
interim periods presented. These consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and
related notes included in the Company's Form 10-K/A as filed with the Securities
and Exchange Commission on or about January 12, 2004.
2 GENERAL COMMENTS
In March 2004, the Company increased its line of credit with a bank from
$1,500,000 to $2,000,000. Advances under this facility bear interest at prime
plus .5% per annum, are due on March 31, 2005 and are collateralized by
substantially all assets of the Company. In addition, all borrowings under this
agreement are personally guaranteed by certain stockholders of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Forward Looking Statements
The statements contained in all parts of this document that are not
historical facts are, or may be deemed to be, "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Such forward-looking statements include,
but are not limited to, those relating to the following: the effect and benefits
of the company's reverse merger transaction; Janel's plans to reduce costs
(including the scope, timing, impact and effects thereof); potential annualized
cost savings; plans for direct entry into the trucking and warehouse
distribution business (including the scope, timing, impact and effects thereof);
the company's ability to improve its cost structure; plans for opening
additional domestic and foreign branch offices (including the scope, timing,
impact and effects thereof); the sensitivity of demand for the company's
services to domestic and global economic and political conditions; expected
growth; future operating expenses; future margins; fluctuations in currency
valuations; fluctuations in interest rates; future acquisitions and any effects,
benefits, results, terms or other aspects of such acquisitions; ability to
continue growth and implement growth and business strategy; the ability of
expected sources of liquidity to support working capital and capital expenditure
requirements; future expectations and outlook and any other statements regarding
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future growth, cash needs, operations, business plans and financial results and
any other statements that are not historical facts.
When used in this document, the words "anticipate," "estimate," "expect,"
"may," "plans," "project," and similar expressions are intended to be among the
statements that identify forward-looking statements. Janel's results may differ
significantly from the results discussed in the forward-looking statements. Such
statements involve risks and uncertainties, including, but not limited to, those
relating to costs, delays and difficulties related to the company's dependence
on its ability to attract and retain skilled managers and other personnel; the
intense competition within the freight industry; the uncertainty of the
company's ability to manage and continue its growth and implement its business
strategy; the company's dependence on the availability of cargo space to serve
its customers; effects of regulation; its vulnerability to general economic
conditions and dependence on its principal customers; accuracy of accounting and
other estimates; risk of international operations; risks relating to
acquisitions; the company's future financial and operating results, cash needs
and demand for its services; and the company's ability to maintain and comply
with permits and licenses; as well as other risk factors described in Janel's
Annual Report on Form 10-K/A filed with the SEC on January 12, 2004. Should one
or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual outcomes may vary materially from those
projected.
Overview
The following discussion and analysis addresses the results of operations
for the three months ended June 30, 2004, as compared to the results of
operations for the three months ended June 30, 2003, and for the nine months
ended June 30, 2004, as compared to the nine months ended June 30, 2003. The
discussion and analysis then addresses the liquidity and financial condition of
the company, and other matters.
Results of Operations
Janel operates its business as a single segment comprised of full-service
cargo transportation logistics management, including freight forwarding - via
air, ocean and land-based carriers - customs brokerage services, warehousing and
distribution services, and other value-added logistics services.
Three Months Ended June 30, 2004 Compared to Three Months Ended June 30, 2003
Revenue. Total revenue (forwarding revenue plus interest and dividends)
for the third quarter of fiscal 2004 was $17,156,067, as compared to $14,952,863
for the same period of fiscal 2003, a year-over-year increase of $2,203,204, or
14.7%. The higher level of revenue was primarily due to greater shipping
activity across essentially all of the customer base.
Forwarding Expense. Forwarding expense is primarily comprised of the fees
paid by Janel directly to cargo carriers to handle and transport its actual
freight shipments on behalf of its customers between initial and final terminal
points. Forwarding expense also includes any duties and/or trucking charges
related to the shipments. As a general rule, revenue received by the company for
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shipments via ocean freight are marked up at a lower percentage versus their
related forwarding expense than are shipments via airfreight, i.e., forwarding
expense as a percentage of revenue is generally higher (and the company earns
less) for ocean freight than for airfreight.
For the third quarter of fiscal 2004, forwarding expense increased by
$2,049,594, or 15.3%, to $15,420,755, as compared to $13,371,161 for the third
quarter of fiscal 2003. The percentage increase was slightly higher than the
increase in the level of total revenue year over year, yielding an increase in
the measure of forwarding expense as a percentage of total revenue from 89.4% to
89.9% year over year. The percentage increase reflects two principal factors:
(1) expansion of Janel's Los Angeles office in June 2003 and the resulting
increase in the company's export business, which is conducted predominantly via
ocean freight; and (2) improving supply-chain management and inventory planning
processes which reduce the frequency of time-critical shipments, allowing
shippers to increasingly utilize more economical ocean freight rather than
higher-cost airfreight.
Selling, General and Administrative Expense. As a percentage of revenue,
selling, general and administrative expense (SG&A) in third quarter of fiscal
2004 declined 50 basis points to 9.36%, as compared to 9.86% in the prior year's
comparable period (and decreased 6 basis points and 22 basis points as compared
to 9.42% and 9.58% in the immediately preceding second and first quarters,
respectively, of fiscal 2004). However, in absolute dollar terms, SG&A expense
increased $130,195, or 8.8%, to $1,604,977 in the third quarter of fiscal 2004,
as compared to $1,474,782 in the third quarter of fiscal 2003. The
year-over-year dollar increase in SG&A primarily reflects two main factors: (1)
incremental sales commissions payable on the $2.2 million increase in
year-over-year revenue; and (2) approximately two months of incremental expenses
in the fiscal 2004 versus the fiscal 2003 period related to an increase in
headcount of nine persons year over year as a result of the expansion of the
company's Los Angeles office in June 2003.
Income Before Taxes. Janel's income before taxes for the third quarter of
fiscal 2004 rose $16,322, from $103,319 in 2003 to $119,641 in 2004, a
year-over-year increase of 15.8%. Consequently, the pretax profit margin on net
revenue (total revenue less forwarding expenses) increased by 36 basis points
year over year from 6.53% in fiscal 2003 to 6.89% in fiscal 2004. The principal
reason for the increase in pretax profit and margin, was the significant
increase in year-over-year revenue combined with the decrease in SG&A expense as
a percentage of total revenue. Taken together, these were sufficient to overcome
the increase in forwarding expense as a percentage of total revenue.
Income Taxes. The effective income tax rate in both the 2004 and 2003
periods reflects the U.S. federal statutory rate and applicable state income
taxes.
Net Income. Net income for the third quarter of fiscal 2004 was $66,741,
an increase of $4,422, or 7.1%, as compared to net income of $62,319 for the
third quarter of fiscal 2003. This reflects a slight decrease in Janel's net
profit margin (net income as a percent of net revenue) of 9 basis points from
3.94% in the third quarter of fiscal 2003 to 3.85% in the third quarter of
fiscal 2004, but an increase of 206 basis points in sequential quarters from the
1.79% net profit margin reported in the second quarter of fiscal 2004.
8
Nine Months Ended June 30, 2004 Compared to Nine Months Ended June 30, 2003
Revenue. Total revenue (forwarding revenue plus interest and dividends)
for the nine months ended June 30, 2004 was $50,215,897, an increase of
$9,669,231, or 23.8%, as compared to $40,546,666 for the first nine months of
fiscal 2003. The increase in revenue in fiscal 2004 was primarily due to
increased business activity across essentially all of the company's customer
base, attributable to both new customer accounts and increased shipping activity
by existing customers, as well as to the incremental revenue generated as a
result of the expansion of the company's Los Angeles office in June 2003.
Forwarding Expense. For the nine months ended June 30, 2004, forwarding
expense was $45,168,259. This represented an increase of $9,203,618, or 25.6%,
as compared to the $35,964,641 forwarding expense incurred for the nine months
ended June 30, 2003. The percentage increase was slightly higher than the
increase in total revenue for the nine months ended June 30, 2004 as compared to
2003, resulting in forwarding expense as a percentage of total revenue
increasing from 88.7% to 89.9% year over year. The year-over-year percentage
increase reflects several principal factors: (1) a higher-than-normal proportion
of higher-cost airfreight in 2003 as shippers were forced to switch to air cargo
as a substitute for their usual ocean freight shipments during the approximately
nine-week-long U.S. West Coast dock strike in October/November 2002; (2)
improving supply-chain management and inventory planning processes which reduced
the frequency of time-critical shipments, allowing shippers to increasingly
utilize more economical ocean freight rather than higher-cost airfreight in
2004; (3) worldwide air cargo shipments in total continuing to be hampered to
some extent during the 2004 period by the weakness of the U.S. dollar versus the
Euro and the Pound Sterling, which curtailed the volume of European imports to
the United States, which typically have utilized a higher proportion of
airfreight in the transportation mix; and (4) the expansion of Janel's Los
Angeles office in June 2003 and the resulting increase in the company's export
business, which is conducted predominantly via ocean freight.
Selling, General and Administrative Expense. For the nine months ended
June 30, 2004, selling, general and administrative expense (SG&A) as a
percentage of revenue declined 112 basis points to 9.45%, as compared to 10.57%
in the prior year's comparable period. In absolute dollars, SG&A expenses were
$4,745,535 and $4,285,554, respectively, in the fiscal 2004 and fiscal 2003
periods, representing a year-over-year increase of $459,981, or 10.7%. The
increase in SG&A expense year over year from the respective nine months of
fiscal 2003 primarily reflected higher sales commissions payable on the
approximately $9.7 million in additional forwarding revenue booked during the
2004 period, and incremental expenses incurred as a result of the addition of
new personnel and expansion of the company's Los Angeles office completed in
June 2003.
Income Before Taxes. Janel's income before taxes fell 4.8% to $269,122 for
the nine months ended June 30, 2004 as compared to $282,710 for the nine months
ended June 30, 2003. Janel's pretax profit margin on net revenue (total revenue
less forwarding expense) decreased by 84 basis points from 6.17% for the nine
months ended June 30, 2003 to 5.33% in the nine months ended June 30, 2004. The
principal reason for the decline was the reduced net revenue margin (down 125
9
basis points) during the 2004 period, which was only partially offset by the
lower SG&A as a percentage of total revenue (down 112 basis points).
Income Taxes. The effective income tax rate in both the 2004 and 2003
periods reflects the U.S. federal statutory rate and applicable state income
taxes.
Net Income. Net income for the nine months ended June 30, 2004, was
$150,722, down $18,988, or 11.2%, as compared to $169,710 for the nine months
ended June 30, 2003. Janel's net profit margin (net income as a percentage of
net revenue) decreased by 71 basis points, from 3.70% in the nine months ended
June 30, 2003 to 2.99% in the nine months ended June 30, 2004.
Liquidity and Capital Resources
Janel's ability to meet its liquidity requirements, which include
satisfying its debt obligations and funding working capital, day-to-day
operating expenses and capital expenditures, depends upon its future
performance, is subject to general economic conditions and other factors, some
of which are beyond its control. During the nine months ended June 30, 2004,
Janel's requirements for working capital decreased by approximately $160,000,
with the increase in cash, accounts receivable and prepaid expenses more than
offsetting the net increase in accounts payable, accrued expenses and taxes
payable.
In March 2004, the company increased its existing bank credit line by
$500,000, from $1,500,000 to $2,000,000. As of June 30, 2004, the company's
outstanding indebtedness against the credit line was $800,000. Management
believes that anticipated cash flow from operations and its expanded line of
credit is sufficient to meet its current working capital and operating needs. At
June 30, 2004, Janel had $1,200,000 of available borrowing remaining under its
bank credit line, permitting it to borrow up to $2,000,000 bearing interest at
prime plus one-half of one percent (0.5%) per annum, which is collateralized by
substantially all the assets of the company and is personally guaranteed by
certain shareholders of the company.
Current Outlook
Janel is primarily engaged in the business of providing full-service cargo
transportation logistics management, including freight forwarding - via air,
ocean and land-based carriers - customs brokerage services, warehousing and
distribution services, and other value-added logistics services. Its results of
operations are affected by the general economic cycle, particularly as it
influences global trade levels and specifically the import and export activities
of Janel's various current and prospective customers. Historically, the
company's quarterly results of operations have been subject to seasonal trends
which have been the result of, or influenced by, numerous factors including
climate, national holidays, consumer demand, economic conditions, the growth and
diversification of its international network and service offerings, and other
similar and subtle forces.
Based upon the results for the nine months ended June 30, 2004, and its
current expectations through internal growth for the remainder of fiscal 2004,
Janel currently projects that gross revenue for its fiscal year ending September
10
30, 2004, exclusive of any potential acquisition activity or other extraordinary
events, will exceed $66 million, up from $56.9 million reported in fiscal 2003.
Janel is continuing to implement its business plan and strategy to grow
its revenue and profitability through its fiscal year ending September 30, 2004
and beyond. The company's strategy, some of which has been implemented, includes
plans to: open additional branch offices both domestically and in Southeast
Asia; introduce additional revenue streams for its existing headquarters and
branch locations; proceed with negotiations and due diligence with privately
held transportation-related firms which may ultimately lead to their acquisition
by the company; expand its existing sales force by hiring additional
commission-only sales representatives with established customer bases; increase
its focus on growing revenues related to export activities; evaluate direct
entry into the trucking and warehouse distribution business as a complement to
the services already provided to existing customers; and continue its reduction
of current and prospective overhead and operating expenses, particularly with
regard to the efficient integration of any additional offices or acquisitions.
Certain elements of the company's growth strategy, principally proposals
for acquisition, are contingent upon the availability of adequate financing at
terms acceptable to the company. The company has engaged in a number of
discussions regarding potential new business affiliations as well as efforts to
secure the adequate long-term financing that would be required to effect such
new business transactions. However, to date, the company has not completed any
such new business transactions nor has it been able to complete any such
financing transactions at terms it deems acceptable. The company cannot
presently anticipate when or if the necessary supporting financing on acceptable
terms will become available. Therefore, the implementation of significant
aspects of the company's strategic growth plan may continue to be deferred
contingent upon the availability and acceptability of such supporting financing
Item 3 Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures.
As required by Rule 13a-15 under the Act, as of the end of the period
covered by this report, the company carried out an evaluation of the
effectiveness of the design and operation of the company's disclosure controls
and procedures. This evaluation was carried out under the supervision and with
the participation of the company's Chief Executive Officer ("CEO) and Principal
Financial and Accounting Officer ("CFO"). Based upon that evaluation, the
company's management, including the CEO and CFO, have concluded that the
company's disclosure controls and procedures are effective in timely alerting
them to material information relating to the company required to be included in
the company's periodic SEC filings.
Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in company
11
reports filed or submitted under the Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
company reports filed under the Act is accumulated and communicated to
management to allow timely decisions regarding required disclosures.
Changes in Internal Controls.
There have been no changes in internal controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of shareholders during the
third fiscal quarter ended June 30, 2004.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits And Reports on Form 8-K.
(a) Exhibits required by item 601 of Regulation S-K.
Exhibit
Number Description of Exhibit
------- ----------------------
31 Rule 13(a)-14(a)/15(d)-14(a) Certifications.
32 Section 1350 Certification.
12
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter for which this report is filed
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.
August 13, 2004
JANEL WORLD TRADE, LTD.
By: /s/ James N. Jannello
------------------------
James N. Jannello
Chief Executive Officer
17