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JANEL CORP - Quarter Report: 2011 March (Form 10-Q)

Unassociated Document


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended March 31, 2011

OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-60608

JANEL WORLD TRADE, LTD.
(Exact name of registrant as specified in its charter)
 
Nevada
86-1005291
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization
Identification No.)
 
150-14 132nd Avenue
 
Jamaica, New York
11434
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code: (718) 527-3800

Inapplicable
(Former name, former address and former fiscal year if changed from last report.)

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes o No o

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer o    Accelerated Filer o    Non-Accelerated Filer  o   Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No x

The number of shares of Common Stock outstanding as of May 16, 2011 was 21,104,868.
 


 
 

 

JANEL WORLD TRADE, LTD.

TABLE OF CONTENTS

     
Page
Part I - Financial Information
   
       
Item 1.
Financial Statements:
   
       
 
Consolidated Balance Sheets, March 31, 2011 (unaudited) and September 30, 2010 (audited)
 
3
       
 
Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2011 and 2010 (unaudited)
 
4
       
 
Consolidated Statements of Changes in Stockholders’ Equity for the Year Ended September 30, 2010 (audited) and the Six Months Ended March 31, 2011 (unaudited)
 
5
       
 
Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2011 and 2010 (unaudited)
 
6
       
 
Notes to Unaudited Consolidated Financial Statements
 
7
       
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
11
       
Item 4.
Controls and Procedures
 
17
       
Part II - Other Information
   
       
Item 6.
Exhibits
 
18
       
 
Signatures
 
20

 
-2-

 
 
PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

JANEL WORLD TRADE LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

   
MARCH 31,
2011
   
SEPTEMBER 30,
 2010
 
   
(Unaudited)
   
(Audited)
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 732,225     $ 1,354,912  
Accounts receivable, net of allowance for doubtful accounts of $163,375 at March 31, 2011 and $106,987 at September 30, 2010
    5,304,737       6,841,607  
Marketable securities
    63,499       54,748  
Loans receivable – officers
    94,219       97,092  
- other
    -       583  
Prepaid expenses and sundry current assets
    145,293       96,608  
TOTAL CURRENT ASSETS
    6,339,973       8,445,550  
                 
PROPERTY AND EQUIPMENT, NET
    121,969       111,478  
                 
OTHER ASSETS:
               
Intangible assets, net
    3,413,175       1,714,702  
Security deposits
    58,588       53,688  
Deferred income taxes
    1,078,000       1,017,000  
TOTAL OTHER ASSETS
    4,549,763       2,785,390  
                 
TOTAL ASSETS
  $ 11,011,705     $ 11,342,418  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Note payable – bank
  $ 951,335     $ 951,335  
Accounts payable – trade
    3,265,273       4,516,547  
Accrued expenses and taxes payable
    284,362       564,386  
Current portion of long-term debt
    97,223       581,019  
Note payable – related party
    431,111       -  
TOTAL CURRENT LIABILITIES
    5,029,304       6,613,287  
                 
OTHER LIABILITIES:
               
Long-term debt
    835,556       13,889  
Deferred compensation
    78,568       78,568  
TOTAL OTHER LIABILITIES
    914,124       92,457  
STOCKHOLDERS’ EQUITY
    5,068,277       4,636,674  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 11,011,705     $ 11,342,418  
 
See notes to financial statements
 
 
-3-

 
 
JANEL WORLD TRADE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
SIX MONTHS ENDED
 MARCH 31,
   
THREE MONTHS ENDED
 MARCH 31,
 
   
2011
   
2010
   
2011
   
2010
 
REVENUES
  $ 49,135,626     $ 36,268,887     $ 22,701,632     $ 19,270,955  
                                 
COSTS AND EXPENSES:
                               
Forwarding expenses
    44,198,680       32,280,020       20,364,643       17,196,205  
Selling, general and administrative
    4,897,451       3,721,104       2,456,266       1,839,712  
Depreciation and amortization
    179,598       121,695       95,563       60,954  
                                 
TOTAL COSTS AND EXPENSES
    49,275,729       36,122,819       22,916,472       19,096,871  
                                 
OPERATING (LOSS) INCOME
    (140,103 )     146,068       (214,840 )     174,084  
                                 
OTHER ITEMS:
                               
Interest and dividend income
    2,187       2,806       934       1,137  
Interest expense
    (72,785 )     (54,827 )     (25,742 )     (32,537 )
TOTAL OTHER ITEMS
    (70,598 )     (52,021 )     (24,808 )     (31,400 )
                                 
                                 
(LOSS) INCOME BEFORE INCOME TAXES
    (210,701 )     94,047       (239,648 )     142,684  
                                 
Income taxes (credits)
    (79,000 )     38,000       (99.377 )     36,600  
                                 
NET (LOSS) INCOME
    (131,701 )     56,047       (140,271 )     106,084  
                                 
Preferred stock dividends
    7,500       7,500       3,750       3,750  
                                 
NET (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS
  $ (139,201 )   $ 48,547     $ (144,021 )   $ 102,334  
                                 
OTHER COMPREHENSIVE INCOME NET OF TAX:
                               
                                 
Unrealized gain (loss) from available for sale securities
  $ 8,429     $ 4,272     $ 2,869     $ 3,120  
                                 
Basic (loss) earnings per share
  $ (0.007 )   $ .003     $ (0.007 )   $ .006  
                                 
Fully diluted (loss) earnings per share
  $ (0.006 )   $ .003     $ (0.006 )   $ .006  
                                 
Basic weighted number of shares outstanding
    20,801,652       18,013,332       21,048,729       18,013,332  
                                 
Fully diluted weighted number of shares outstanding
    22,850,528       18,453,332       22,704,285       18,453,332  
 
See notes to financial statements
 
 
-4-

 

JANEL WORLD TRADE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
 
   
CAPITAL STOCK
   
PREFERRED STOCK
   
TREASURY
   
ADDITIONAL
PAID-IN
   
RETAINED
   
ACCUMULATED
OTHER
COMPREHENSIVE
       
    SHARES     $     SHARES     $    
STOCK
   
CAPITAL
   
EARNINGS
   
LOSS
   
TOTAL
 
BALANCE–SEPTEMBER 30, 2010
    18,503,082     $ 18,504       1,215,525     $ 1,216     $ (11,266 )   $ 4,097,864     $ 541,694     $ (11,338 )   $ 4,636,674  
                                                                         
Net loss
    -       -       -                       -       (131,701 )     -       (131,701 )
                                                                         
Settlement of litigation
    780,000       780       (141,250 )     (142 )     -       (638 )     -       -       -  
                                                                         
Dividends to preferred shareholders
    -       -       -       -       -       -       (7,500 )     -       (7,500 )
                                                                         
Common stock issuance
    1,714,286       1,714       -       -       -       598,286       -       -       600,000  
                                                                         
Common stock issued for conversion of Class B Preferred Stock
    107,500       107       (10,750 )     (10 )     -       (97 )     -       -       -  
                                                                         
Purchase of 107,500 shares of Treasury stock
    -       -       -       -       (37,625 )     -       -       -       (37,625 )
                                                                         
Other comprehensive gains:
                                                                       
Unrealized gains on available-for-sale marketable securities
    -       -       -       -       -       -       -       8,429       8,429  
                                                                         
BALANCE – March 31, 2011
    21,104,868     $ 21,105       1,063,525     $ 1,064     $ (48,891 )   $ 4,695,415     $ 402,493     $ (2,909 )   $ 5,068,277  
 
See notes to financial statements
 
 
-5-

 
 
JANEL WORLD TRADE, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
SIX MONTHS ENDED
 MARCH 31,
 
    2011     2010  
OPERATING ACTIVITIES:
           
Net  (loss) income
  $ (131,701 )   $ 56,047  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
               
Depreciation and amortization
    179,598       121,695  
Amortization of imputed interest
    47,315       13,764  
Deferred income taxes
    (61,000 )     11,000  
Changes in operating assets and liabilities:
               
Accounts receivable
    1,536,870       (514,305 )
Prepaid expenses and sundry current assets
    (53,584 )     144,491  
Accounts payable and accrued expenses
    (1,531,298 )     (49,978 )
NET CASH USED IN OPERATING ACTIVITIES
    (13,800 )     (217,286 )
                 
INVESTING ACTIVITIES:
               
Acquisition of property and equipment, net
    (48,564 )     (6,179 )
Purchase of marketable securities
    (322 )     (192 )
NET CASH USED IN INVESTING ACTIVITIES
    (48,886 )     (6,371 )
                 
FINANCING ACTIVITIES:
               
Dividend paid
    (7,500 )     (3,796 )
Repayment of long-term debt
    (83,333 )     (308,334 )
Repayment of note payable – related party
    (435,000 )     -  
Repayment  of loans receivable
    3,457       20,674  
Purchase of treasury stock
    (37,625 )     -  
Repayment of loans payable – related party
    -       (100,078 )
NET CASH USED IN FINANCING ACTIVITIES
    (560,001 )     (391,534 )
                 
DECREASE IN CASH AND CASH EQUIVALENTS
    (622,687 )     (615,191 )
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD
    1,354,912       1,483,150  
CASH AND CASH EQUIVALENTS – END OF PERIOD
  $ 732,225     $ 867,959  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
               
Cash paid during the period for:
               
Interest
  $ 25,471     $ 41,063  
Income taxes
  $ 322,493     $ 1,708  
Non-cash financing activities:
               
Unrealized gain (loss) on marketable securities
  $ 8,429     $ 4,272  
Dividends declared to preferred stockholders
  $ (7,500 )   $ (7,500 )
Cancellation of note payable – other (Note 4)
  $ -     $ (125,000 )
Acquisition of business:
               
Intangible assets acquired
  $ 1,840,000          
Common stock issued
    (600,000 )        
Long-term debt issued (net of imputed interest)
    (1,240,000 )        
Effect on cash
  $ -          

See notes to financial statements
 
 
-6-

 
 
JANEL WORLD TRADE, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011
(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 as filed with the Securities and Exchange Commission on or about December 28, 2010.

2             BUSINESS SEGMENT INFORMATION

The Company is organized into two reportable segments, full service cargo transportation logistics management and computer software sales, support and maintenance.
 
Six Months Ended March 31, 2011
 
Consolidated
   
Transportation Logistics
   
Computer Software
 
Total revenues
  $ 49,135,626     $ 49,135,626     $ -  
Net revenues
  $ 4,936,946     $ 4,936,946     $ -  
Operating loss
  $ (210,701 )   $ (118,290 )   $ (92,411 )
Identifiable assets
  $ 11,011,705     $ 10,981,007     $ 30,698  
Capital expenditures
  $ 48,564     $ 48,564     $ -  
Depreciation and amortization
  $ 179,598     $ 160,022     $ 19,576  
Equity
  $ 5,068,277     $ 10,162,301     $ (5,094,024 )
 
Six Months Ended March 31, 2010
 
Consolidated
   
Transportation
Logistics
   
Computer
Software
 
Total revenues
  $ 36,268,887     $ 36,211,681     $ 57,206  
Net revenues
  $ 3,988,867     $ 3,931,661     $ 57,206  
Operating income (loss)
  $ 146,068     $ 322,198     $ (176,130 )
Identifiable assets
  $ 9,636,876     $ 9,541,084     $ 95,792  
Capital expenditures
  $ 6,179     $ 6,179     $ -  
Depreciation and amortization
  $ 121,695     $ 105,382     $ 16,313  
Equity
  $ 4,309,929     $ 9,329,606     $ (5,019,677 )

 
-7-

 
 
Three Months Ended March 31, 2011
 
Consolidated
   
Transportation
Logistics
   
Computer
 Software
 
Total revenues
  $ 22,701,632     $ 22,701,632     $ -  
Net revenues
  $ 2,336,989     $ 2,336,989     $ -  
Operating loss
  $ (239,648 )   $ (217,072 )   $ (22,576 )
Identifiable assets
  $ 11,011,705     $ 10,981,007     $ 30,698  
Capital expenditures
  $ 35,064     $ 35,064     $ -  
Depreciation and amortization
  $ 84,035     $ 69,353     $ 14,682  
Equity
  $ 5,068,277     $ 10,162,301     $ (5,094,024 )
 
Three Months Ended March 31, 2010
 
Consolidated
   
Transportation
Logistics
   
Computer
 Software
 
Total revenues
  $ 19,270,955     $ 19,246,785     $ 24,170  
Net revenues
  $ 2,074,750     $ 2,050,580     $ 24,170  
Operating income (loss)
  $ 174,084     $ 253,918     $ (79,834 )
Identifiable assets
  $ 9,636,876     $ 9,541,084     $ 95,792  
Capital expenditures
  $ 5,214     $ 5,214     $ -  
Depreciation and amortization
  $ 54,070     $ 45,914     $ 8,156  
Equity
  $ 4,309,929     $ 9,329,606     $ (5,019,677 )

3             LONG-TERM DEBT

Long-term debt consists of the following:

   
March 31,
2011
   
September 30,
2010
 
Non-interest bearing note payable to a related party, net of imputed interest, due in payments of $466,667 in October 2011, 2012 and 2013
  $ 1,266,667     $ -  
                 
Non-interest bearing note payable, net of imputed interest, due in payments of $435,000 in July 2011. Note was paid in October 2010.
      -         414,352  
                 
Term loan payable in monthly installments of $13,889, plus interest at a bank’s prime rate minus .50% per annum.  The loan is collateralized by substantially all assets of a subsidiary of the Company.
        97,223           180,556  
      1,363,890       594,908  
Less current portion
    528,334       581,019  
    $ 835,556     $ 13,889  
These obligations mature as follows:
               
                            2011
  $ 528,334     $ 581,019  
                            2012
    417,778       13,889  
                            2013
    417,778       -  
    $ 1,363,890     $ 594,908  

 
-8-

 

4             ACQUISITIONS

On October 4, 2010, the Company acquired the international freight forwarding business of Ferrara International Logistics Inc. (“FIL”) pursuant to the terms of an Asset Purchase Agreement (the “Purchase Agreement”) between the Company and Ferrara.

The purchase price under the terms of the Purchase Agreement consists of (i) cash in an amount equal to 70% of the annual actual earnings before interest, taxes, depreciation and amortization (EBITDA) achieved over the three 12-month periods following the Closing (the “Earn-Out Period”) from revenues generated from the customers included in the purchased assets, and (ii) 1,714,286 restricted shares of the Company’s Common Stock valued at $600,000 based on the closing market price of the stock on October 1, 2010 (the “Share Allocation”).   The Share Allocation is subject to decrease if actual EBITDA from revenues generated from the customers included in the purchased assets during the Earn-Out Period is below $2 million, and will be issued in three installments on October 4, 2011, 2012 and 2013.

Purchase price allocation

In accordance with the acquisition method of accounting the Company has initially allocated the consideration to the identifiable intangible assets, based on their estimated fair values.  Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets.

The initial consideration estimated at $1,840,000 consists of $600,000 of common stock and $1,400,000 non-interest bearing notes issued, net of imputed interest of $160,000.  The consideration has been allocated as follows:

Intangible assets:
     
Customer relationships subject to amortization
  $ 1,220,000  
Goodwill
    620,000  
Total fair value
  $ 1,840,000  
 
Pursuant to the terms of the Purchase Agreement, Nicholas V. Ferrara, the principal owner of FIL, will be employed by the Company at an annual salary of $182,000 plus benefits.

5             LEGAL PROCEEDINGS

(1)           In March 2010 the Company reached a settlement agreement and mutual general release with a defendant in litigation which had commenced in 2008.  Terms of the settlement include the issuance of 489,750 shares of Janel’s common stock, surrender of 69,475 shares of preferred stock, elimination of a $125,000 note payable to the defendant and a release of any and all claims and demands of the defendant.

In November 2010 the Company reached a settlement agreement and mutual general releases with another defendant.  Terms of the settlement include the issuance of 780,000 shares of Janel’s common stock to Mr. Francis, as well as payments totaling $23,359.  Upon issuance and delivery of the settlement shares and payment of the cash settlement, both signed a stipulation and Order of Dismissal ending all claims made in their entirety.

(2)           On December 3, 2010 the former “CFO” of Janel filed a complaint alleging, among other things, discrimination by the Company.  No damages were claimed in the complaint.  The Company’s response to the complaint is due May 20, 2011.  The Company intends to vigorously defend this claim.
 
 
-9-

 
 
6             SUBSEQUENT EVENTS

On April 5, 2011, the Company entered into a term loan with Community National Bank in the amount of $400,000, bearing interest at 6% per annum.  The loan is for a five-year term, expiring in April 2016 and is payable in monthly installments of $7,735 including interest.  The loan is being used to purchase equipment.

Subsequent to the period covered by this report, the company began a new line of business which is focused on vertical sales primarily in the food industry and has entered into a 10 year exclusive agreement with its first customer. The agreement is for all supply chain services, including supplier selection, manufacturing, transportation, import, distribution, marketing, and sales.

 
-10-

 
 
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used throughout this Report, “we,” “our,” “Janel”, “the Company” and similar words refers to Janel World Trade, Ltd.

forward-looking statements

           This Quarterly Report on Form 10-Q contains certain forward-looking statements reflecting our current expectations with respect to our operations, performance, financial condition, and other developments.  These forward-looking statements may generally be identified by the use of the words “may”, “will”, “believes”, “should”, “expects”, “anticipates”, “estimates”, and similar expressions.  These statements are necessarily estimates reflecting management’s best judgment based upon current information and involve a number of risks and uncertainties.  We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and readers are advised that various factors could affect our financial performance and could cause our actual results for future periods to differ materially from those anticipated or projected.  While it is impossible to identify all such factors, such factors include, but are not limited to, those risks identified in our periodic reports filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.

overview

Janel is a non-asset based third party logistics services provider engaged in full-service cargo transportation logistics management, including freight forwarding via air, ocean and land based carriers, customs brokerage services, and warehousing and distribution services.   Our headquarters are in Jamaica, New York and we operate through a network which includes 4 company-owned offices in the United States and independent international agents in approximately 52 countries around the world.

As a non-asset based third party logistics provider, we do not own any transportation assets and fulfill our transportation needs by purchasing transportation services from direct (asset-based) carriers and from other transportation providers who generally provide us with favorable rates with priority handling of our shipments.   By consolidating multiple shipments from our customers we are able to negotiate favorable pricing from these transportation providers and can offer lower rates to our customers than they could obtain on their own.  This non-asset based approach provides us with a variable cost structure and allows for a high level of operating flexibility.  Our investment in assets is limited to the purchase of office and computer equipment and the leasing of office and warehouse space for our company owned offices.

Historically, Janel’s quarterly operating results have been subject to seasonal trends.  The fiscal first and second quarters have traditionally been the weakest and the fiscal third and fourth quarters have traditionally been the strongest. This pattern has been the result of, or influenced by, numerous factors including climate, national holidays, consumer demand, economic conditions and other similar and subtle forces.  A significant portion of our revenues are derived from customers in industries with shipping patterns closely tied to consumer demand and from customers with shipping patterns dependent upon just-in-time production schedules. Many customers may ship a significant portion of their goods at or near the end of a quarter.  Therefore, the timing of our revenues are, to a large degree, affected by factors beyond our control, such as shifting consumer demand for retail goods and manufacturing production delays.  We cannot accurately forecast many of these factors, nor can we estimate the relative impact of any particular factor and, as a result, there is no assurance that historical patterns will continue in the future

results of operations

The following discussion and analysis addresses the results of operations for the three and six months ended March 31, 2011, as compared to the results of operations for the three and six months ended March 31, 2010.  The discussion and analysis then addresses the liquidity and financial condition of the Company, and other matters.

Janel operates its business as two reportable segments.  The first segment is 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.  The second segment, which is no longer active, was comprised of computer software sales, support and maintenance; and from January 1, 2011 the Company has only incurred costs associated with the wind-down of this business segment.
 
 
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Subsequent to the period covered by this report, the Company began a new line of business which is comprised of vertical sales primarily in the food industry.  This new business will be involved with supply chain services, including supplier selection, manufacturing, transportation, import, distribution, marketing, and sales within the food industry.

On October 4, 2010, the Company acquired the international freight forwarding assets of Ferrara International Logistics, Inc., a New Jersey corporation (“FIL”) pursuant to the terms of an Asset Purchase Agreement (the “Purchase Agreement”) between the Registrant and FIL dated October 4, 2010.  The purchase price paid and to be paid under the terms of the Purchase Agreement consists of (i) cash in an amount equal to 70% of the annual actual earnings before interest, taxes, depreciation and amortization (EBITDA) achieved over the three 12-month periods following the Closing (the “Earn-Out Period”) from revenues generated from the customers included in the purchased assets, and (ii) 1,714,286 restricted shares of the Registrant’s Common Stock valued at $600,000 based on the closing market price of the stock on October 1, 2010 (the “Share Allocation”), issued pursuant to an exemption from registration set forth in Section 4(2) of the Securities Act of 1933 and Regulation D promulgated there under.  The Share Allocation is subject to decrease if actual EBITDA from revenues generated from the customers included in the purchased assets during the Earn-Out Period is below $2 million, and will be issued in three installments on October 4, 2011, 2012 and 2013.

Three months ended March 31, 2011 and 2010

Revenue. Total revenue for the second quarter of fiscal 2011 was $22,701,632, as compared to $19,270,955 for the same period of fiscal 2010, a year-over-year increase of $3,430,677 or 17.8%.  For the three months of fiscal 2010, revenue from the computer software business segment totaled $24,170.  For the three months of fiscal 2011, transportation logistics accounted for all of the revenue and there was no revenue from the computer software business segment.  The Company does not anticipate any future revenue from the computer software business segment.  When compared to the prior year, the Company’s transportation logistics segment revenue increased by 17.9% to $22,701,632 for the first quarter of 2011 from $19,246,785 for the same period of fiscal 2010.  This increase is mainly the result of the relative strengthening of the U.S. economy year-over-year, the consequent increase in ocean fright and airfreight shipping activity by existing customers between the two periods, and by new revenue from the FIL asset purchase acquisition.  Net revenue (revenue minus forwarding expenses) in fiscal 2011 was $2,336,989, an increase of $262,239 (12.6%) as compared to net revenue of $2,074,750 for the same period of fiscal 2010.

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, trucking and warehousing charges related to the shipments.  For the second quarter of fiscal 2011 and primarily because of the higher revenue base, forwarding expense increased by $3,168,438, or 18.4%, to $20,364,643 as compared to $17,196,205 for the same period of fiscal 2010.  Forwarding expense as a percentage of revenue increased to 89.7% for the first quarter of fiscal 2011, from 89.2% for the same period of fiscal 2010, a 0.5 percentage point increase.  This percentage increase is principally the result of (i) a greater amount of revenue generated from our two largest customers where the forwarding expenses as a percentage of revenue are historically higher than the forwarding expenses as a percentage of revenue from other customers, and (ii) higher forwarding expenses as a percentage of revenue from these top two customers when compared to the same period of fiscal 2010.

Selling, General and Administrative Expense. For the three months ended March 31, 2011 and 2010, selling, general and administrative expenses were $2,551,829 (11.2% of revenue), and $1,900,666 (9.9% of revenue), respectively.  This represents a year-over-year increase of $651,163, or 34.3%, primarily the result of new selling, general and administrative expenses associated with the FIL asset purchase acquisition of approximately $517,671 (includes $30,500 of amortization expense) and the elimination this year of some of the payroll cutbacks made in the prior year resulting from the Company’s austerity program, during which personnel positions were eliminated and workweek reductions were implemented due to the lower volume of business in the prior year.  For the same reasons listed above, selling, general and administrative expenses as a percentage of revenue increased to 11.2% of revenue for the three months ended March 31, 2011 from 9.9% for the three months ended March 31, 2010.

Income (Loss) Before Taxes. For the reasons stated above, the Company incurred a loss before taxes of ($239,648) for the second quarter of fiscal 2011, as compared to income before taxes of $142,684 for the same period of fiscal 2010.

Income Taxes.   The company recorded a net income tax benefit of ($99,377) for the three months ended March 31, 2011 compared to an income tax provision of $36,600 for the same period of fiscal 2010.  Both fiscal periods reflect the U.S. federal statutory rate and applicable state income taxes.

 
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Net Income (Loss).   For the three months ended March 31, 2011, there was a net loss of ($140,271) compared to net income of $106,084 for the three months ended March 31, 2010.  Net loss available to common shareholders for the three months ended March 31, 2011 was ($144,021), or ($0.006) per diluted share, as compared to net income available to common shareholders of $102,334, or $0.006 per diluted share, for the three months ended March 31, 2010.

Six months ended March 31, 2011 and 2010

Revenue. Total revenue for the six months ended March 31, 2011 was $49,135,626, as compared to $36,268,887 for the same period of fiscal 2010, a year-over-year increase of $12,866,739 or 35.5%.  For the six months of fiscal 2010, revenue from the computer software business segment totaled $57,206.  For the six months of fiscal 2011, transportation logistics accounted for all of the revenue and there was no revenue from the computer software business segment.  The Company does not anticipate any future revenue from the computer software business segment.  When compared to the prior year, the Company’s transportation logistics segment revenue increased by 35.7% to $49,135,626 for the six months ended March 31, 2011 from $36,211,681 for the same period of fiscal 2010.  This increase is mainly the result of the relative strengthening of the U.S. economy year-over-year, the consequent increase in ocean fright and airfreight shipping activity by existing customers between the two periods, and by new revenue from the FIL asset purchase acquisition.  Net revenue (revenue minus forwarding expenses) in fiscal 2011 was $4,936,946, an increase of $948,079 (23.8%) as compared to net revenue of $3,988,867 for the same period of fiscal 2010.

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, trucking and warehousing charges related to the shipments.  For the six months ended March 31, 2011 and primarily because of the higher revenue base, forwarding expense increased by $11,918,660, or 36.9%, to $44,198,680 as compared to $32,280,020 for the same period of fiscal 2010.  Forwarding expense as a percentage of revenue increased to 90.0% for the six months ended March 31, 2011, from 89.0% for the same period of fiscal 2010, a 1.0 percentage point increase.  This percentage increase is principally the result of (i) a greater amount of revenue generated from our two largest customers where the forwarding expenses as a percentage of revenue are historically higher than the forwarding expenses as a percentage of revenue from other customers, and (ii) higher forwarding expenses as a percentage of revenue from these top two customers when compared to the same period of fiscal 2010.

Selling, General and Administrative Expense. For the six months ended March 31, 2011 and 2010, selling, general and administrative expenses were $5,077,049 (10.3% of revenue), and $3,842,799 (10.6% of revenue), respectively.  This represents a year-over-year increase of $1,234,250, or 32.1%, primarily the result of new selling, general and administrative expenses associated with the FIL asset purchase acquisition of approximately $976,653 (includes $61,000 of amortization expense and $18,411 of one-time legal and professional transaction related costs) and the elimination this year of some of the payroll cutbacks made in the prior year resulting from the Company’s austerity program, during which personnel positions were eliminated and workweek reductions were implemented due to the lower volume of business in the prior year.  Primarily because of the higher revenue base, selling, general and administrative expenses as a percentage of revenue decreased to 10.3% of revenue for the six months ended March 31, 2011 from 10.6% for the six months ended March 31, 2010.

Income (Loss) Before Taxes. For the reasons stated above, the Company incurred a loss before taxes of ($210,701) for the six months ended March 31, 2011, as compared to income before taxes of $94,047 for the same period of fiscal 2010.

Income Taxes.   The company recorded a net income tax benefit of ($79,000) for the six months ended March 31, 2011 compared to an income tax provision of $38,000 for the same period of fiscal 2010.  Both fiscal periods reflect the U.S. federal statutory rate and applicable state income taxes.

Net Income (Loss).   For the six months ended March 31, 2011, there was a net loss of ($131,701) compared to net income of $56,047 for the six months ended March 31, 2010.  Net loss available to common shareholders for the six months ended March 31, 2011 was ($139,201), or ($0.006) per diluted share, as compared to net income available to common shareholders of $48,547, or $0.003 per diluted share, for the six months ended March 31, 2010.

liquidity and capital resources

General.  Our ability to satisfy our liquidity requirements, which include satisfying our debt obligations and funding working capital, day-to-day operating expenses and capital expenditures depends upon our future performance, which is subject to general economic conditions, competition and other factors, some of which are beyond our control.  If we achieve significant near-term revenue growth, we may experience a need for increased working capital financing as a result of the difference between our collection cycles and the timing of our payments to vendors.  Also, as a non-asset based freight forwarder, generally we do not have a need for significant capital expenditure.

 
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Janel’s cash flow performance for the six months ended March 31, 2011 is not necessarily indicative of future cash flow performance.

As of March 31, 2011, and compared with the prior fiscal year, the Company’s cash and cash equivalents declined by $(622,687), or (46.0)%, to $732,225 from $1,354,912, respectively. During the six months ended March 31, 2011, Janel’s net working capital (current assets minus current liabilities) decreased by $(521,595), or (28.5)%%, from $1,832,263 at September 30, 2010, to $1,310,669 at March 31, 2011.  This decrease is primarily due to the $431,111 current portion of the related party note payable established for the earn-out associated with the FIL Purchase Agreement (refer to Note 4 to the Company’s Notes to the unaudited Consolidated Financial Statements contained in this Quarterly Report).

Cash flows from operating activities.  Net cash used in operating activities was $(13,800) for the six months ended March 31, 2011, compared to net cash used in operating activities of $(217,286) for the six months ended March 31, 2010.  The change was principally driven by an increase in collections of outstanding accounts receivable, which were partially offset by an increase in payments of outstanding accounts payable and the net loss for the six months ended March 31, 2011.

Cash flows from investing activities.  Net cash used for investing activities, primarily capital expenditures for property and equipment, were $48,886 and $6,371 for the six months ended March 31, 2011 and 2010, respectively.

Cash flows from financing activities.  Net cash used for financing activities was $560,001 for the six months ended March 31, 2011, compared to $391,534 for the six months ended March 31, 2010.  The cash used in financing activities for the six months ended March 31, 2011, consisted primarily of the early repayment on October 4, 2010 of the $435,000 non-interest bearing note payable due under the July 2008 FIL asset purchase acquisition (refer to Note 3 to the Company’s Notes to the unaudited Consolidated Financial Statements contained in this Quarterly Report).  The cash used in financing activities for fiscal year ended 2009, consisted primarily of repayments under the term and line note agreements with JPMorgan Chase Bank.

Community National Bank Borrowing Facility.  On August 3, 2010, the Company’s Janel Group of New York, Inc. (“Janel New York”) subsidiary entered into a one year $3.5 million revolving line of credit agreement with Community National Bank (“CNB”).  The new credit facility (the “CNB Facility”) replaces Janel New York’s previous term loan agreement with JPMorgan Chase Bank. The interest rate of the CNB Facility is the prime rate plus 1%, with a minimum rate of 5%.  Under the CNB Facility, Janel New York may borrow up to $3.5 million limited to 80% of the Company’s aggregate outstanding eligible accounts receivable.  On August 3, 2010, $951,190 of the CNB Facility was used to pay off the outstanding balances under the term loan with JPMorgan Chase Bank. The CNB Facility is for a one year term, expiring on July 31, 2011, and obligations under the CNB Facility are secured by all of the assets of the Company, and are guaranteed by the Company and James N. Jannello, the Company’s Chief Executive Officer.  As of March 31, 2011, there were outstanding borrowings of $951,336 under the CNB Facility (which represented 51.4% of the amount available thereunder) out of a total amount available for borrowing under the CNB Facility of approximately $1,852,237.

Community National Bank Term Loan.  On April 5, 2011 (subsequent to the period covered by this report) Janel New York entered into a term loan in the amount of $400,000 with CNB (“CNB Term Loan”).  The interest rate of the CNB Term Loan is 6%.  The CNB Term Loan is for a five year term, expiring April 5, 2016, with monthly installment payments of principal and interest totaling $7,735.  Obligations under the CNB Term Loan are secured by all of the assets of the Company, and are guaranteed by the Company and James N. Jannello, the Company’s Chief Executive Officer.  The borrowings under the CNB Term Loan are being used to construct a 15,000 square foot walk/drive-in freezer in our New Jersey warehouse for our traditional freight forwarding and logistics segment.

 Working Capital Requirements.  The Company’s cash needs are currently met by the CNB Facility and cash on hand.  As of December 31, 2010, the Company had $900,901 available under its $3.5 million CNB Facility and $732,225 in cash from operations and cash on hand.  We believe that our current financial resources will be sufficient to finance our operations and obligations (current and long-term liabilities) for the long and short terms.  However, our actual working capital needs for the long and short terms will depend upon numerous factors, including our operating results, the cost associated with growing the Company either internally or through acquisition, competition, and the availability of a revolving credit facility, none of which can be predicted with certainty.
 
 
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Current Outlook

Janel’s 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. The Company cannot accurately forecast many of these factors nor can the Company estimate accurately the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns, if any, will continue in future periods.

Janel is progressing with the implementation of its business plan and strategy to grow its revenue and profitability for fiscal 2011 and beyond through other avenues. The Company’s strategy for growth includes plans to: open, as warranted, additional branch offices domestically and/or outside the continental United States; 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 revenue 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 focus on containing 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 is continuing in its efforts to secure long-term financing, but has to date been unable to complete any such long-term financing transactions at terms it deems acceptable, and cannot presently anticipate when or if financing on acceptable terms will become available. Therefore, the implementation of significant aspects of the Company’s strategic growth plan may be deferred beyond the originally anticipated timing.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these financial statements requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.  Since future events and their effects cannot be determined with absolute certainty, the determination of estimates requires the exercise of judgment.  Actual results could differ from those estimates, and such difference may be material to the financial statements.  The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources, primarily allowance for doubtful accounts, accruals for transportation and other direct costs, accruals for cargo insurance, and deferred income taxes.  Management bases its estimates on historical experience and on various assumptions which are believed to be reasonable under the circumstances.  We reevaluate these significant factors as facts and circumstances change.  Historically, actual results have not differed significantly from our estimates.  These accounting policies are more fully described in Note 1 of the Notes to the Consolidated Financial Statements.

Management believes that the nature of the Company’s business is such that there are few, if any, complex challenges in accounting for operations. Revenue recognition is considered the critical accounting policy due to the complexity of arranging and managing global logistics and supply-chain management transactions.

Revenue Recognition

A. Full-Service Cargo Transportation Logistics Management

Revenues are derived from airfreight, ocean freight and custom brokerage services. The Company is a non-asset-based carrier and accordingly does not own transportation assets. The Company generates the major portion of its air and ocean freight revenues by purchasing transportation services from direct carriers (airlines, steam ship lines, etc.) and reselling those services to its customers. By consolidating shipments from multiple customers and availing itself of its buying power, the Company is able to negotiate favorable rates from the direct carriers, while offering to its customers lower rates than the customers could obtain themselves.

 
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Airfreight revenues include the charges for carrying the shipments when the Company acts as a freight consolidator. Ocean freight revenues include the charges for carrying the shipments when the Company acts as a Non-Vessel Operating Common Carrier (NVOCC).  In each case, the Company is acting as an indirect carrier.  When acting as an indirect carrier, the Company will issue a House Airway Bill (HAWB) or a House Ocean Bill of Lading (HOBL) to customers as the contract of carriage.  In turn, when the freight is physically tendered to a direct carrier, the Company receives a contract of carriage known as a Master Airway Bill for airfreight shipments and a Master Ocean Bill of Lading for ocean shipments.  At this point the risk of loss passes to the carrier, however, in order to claim for any such loss, the customer is first obligated to pay the freight charges.

Based upon the terms in the contract of carriage, revenues related to shipments where the Company issues a HAWB or a HOBL are recognized at the time the freight is tendered to the direct carrier.  Costs related to the shipments are recognized at the same time.

Revenues realized when the Company acts as an agent for the shipper and does not issue a HAWB or a HOBL include only the commission and fees earned for the services performed.  These revenues are recognized upon completion of the services.

Customs brokerage and other services involves provide multiple services at destination including clearing shipments through customs by preparing required documentation, calculating and providing for payment of duties and other charges on behalf of the customers, arranging for any required inspections, and arranging for final delivery.  These revenues are recognized upon completion of the services.

The movement of freight may require multiple services. In most instances the Company may perform multiple services including destination break bulk and value added services such as local transportation, distribution services and logistics management.  Each of these services has separate fee that is recognized as revenue upon completion of the service.

Customers will frequently request an all-inclusive rate for a set of services that is known in the industry as “door-to-door services.”  In these cases, the customer is billed a single rate for all services from pickup at origin to delivery.  The allocation of revenue and expense among the components of services when provided under an all inclusive rate are done in an objective manner on a fair value basis in accordance with Emerging Issues Task Force (EITF) 00-21, “Revenue Arrangements with Multiple Deliverables.”

B. Computer Software Sales, Support and Maintenance

The Company recognizes revenue, including multiple element arrangements, in accordance with the provisions of the SEC’s Staff Accounting bulletin (“SAB”) No. 104, Revenue Recognition, and the Financial Accounting Standards Board’s (“FASB”), and EITF 00-21, Revenue Agreements with Multiple Deliverables.  Revenue from the sale of the Company’s products and services are recognized when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable, and collectability is reasonably assured. Amounts billed in excess of revenue recognized are recorded as deferred revenue in the balance sheet.
 
Estimates

While judgments and estimates are a necessary component of any system of accounting, the Company’s use of estimates is limited primarily to the following areas that in the aggregate are not a major component of the Company’s consolidated statements of income:

 
a.
accounts receivable valuation;
 
 
b.
the useful lives of long-term assets;
 
 
c.
the accrual of costs related to ancillary services the Company provides; and
 
 
d.
accrual of tax expense on an interim basis.

Management believes that the methods utilized in all of these areas are non-aggressive in approach and consistent in application. Management believes that there are limited, if any, alternative accounting principles or methods which could be applied to the Company’s transactions. While the use of estimates means that actual future results may be different from those contemplated by the estimates, the Company believes that alternative principles and methods used for making such estimates would not produce materially different results than those reported.

 
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ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed by us in the reports that we file or submit under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and is accumulated and communicated to management in a timely manner.  Our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer have evaluated this system of disclosure controls and procedures as of the end of the period covered by this quarterly report, and have concluded that the system is effective.  There have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
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PART II - OTHER INFORMATION

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On October 12, 2006, the Company’s Board of Directors authorized the purchase of up to 300,000 shares of the Company’s common stock, subject to certain conditions.  The repurchase plan may be suspended by the Company at any time.    The following table sets forth information regarding our repurchases or acquisitions of common stock during the period covered by this Report:

Period
 
Total
Number of
Shares (or
Units)
Purchased
   
Average
Price
Paid per
Share (or
Unit)
   
Total
Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
   
Maximum
Number (or
Approximate Dollar
Value) of Shares (or
Units) that May Yet
Be Purchased Under
the Plans or
Programs
 
Repurchases from January 1, 2011 through January 1, 2011
   
107,500
    $
0.35
     
107,500
     
40,324
 
Repurchases from February 1, 2011 through February 28, 2011
   
-0-
     
-0-
     
-0-
     
40,324
 
Repurchase from March 1, 2011 through March 31, 2011
   
-0-
     
-0-
     
-0-
     
40,324
 
Total
   
107,500
    $
0.35
     
107,500
     
40,324
 

ITEM 6.  EXHIBITS

Exhibit No.
 
3.1
Articles of Incorporation of Wine Systems Design, Inc. (predecessor name) (incorporated by reference to Exhibit 3A to Wine Systems Design, Inc. (predecessor name) Registration Statement on Form SB-2 filed May 10, 2001, File No. 333-60608)
 
3.2
Restated and Amended By-Laws of Janel World Trade, Ltd. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2010, File No. 333-60608)
 
3.3
Certificate of Designation of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 17, 2007 File No. 333-60608)
 
3.4
Certificate of Designations of Series B Convertible Stock (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed October 22, 2007, File No. 333-60608)
 
10.1
Janel Stock Option Incentive Plan adopted December 12, 2002 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2002, File No. 333-60608)
 
10.2
Asset Purchase Agreement between Janel World Trade, Ltd. and Ferrara International Logistics, Inc. dated October 4, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 8, 2010, File No. 333-60608)
 
10.3
Sales Agency and Service Agreement between Janel World Trade, Ltd. and Ferrara International Logistics, Inc. entered into May 19, 2008 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed May 22, 2008, File No. 333-60608)
 
10.4
Promissory Note dated August 2, 2010 made by Registrant’s subsidiary, The Janel Group of New York, Inc., payable to Community National Bank (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2010, File No. 333-60608)
 
10.5
Business Loan Agreement dated August 2, 2010 between Registrant’s subsidiary, The Janel Group of New York, Inc., and Community National Bank (incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2010, File No. 333-60608)
 
 
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10.6
Commercial Guaranty dated August 2, 2010 made by Registrant with respect to the obligation of Registrant’s subsidiary, The Janel Group of New York, Inc., to Community National Bank (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2010, File No. 333-60608)
 
10.7
Commercial Security Agreement dated August 2, 2010 made by Registrant for the benefit of Community National Bank, securing Registrant’s obligations under its guaranty of the obligation of Registrant’s subsidiary, The Janel Group of New York, Inc., to Community National Bank (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2010, File No. 333-60608)
 
31.1
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
 
31.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Operating Officer*
 
31.3
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
 
32.1
Section 1350 Certifications*
 
99.1
Press release dated May 16, 2011*
 
 
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SIGNATURES

Pursuant to the requirements 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.
 
    JANEL WORLD TRADE, LTD.  
    Registrant  
       
Dated: May 16, 2011
  /s/  James N. Jannello  
   
Executive Vice President and Chief Executive
 
   
Officer (Principal Executive Officer)
 
       
       
    /s/  Philip J. Dubato  
   
Executive Vice President of Finance and Chief
 
   
Financial Officer (Principal Financial Officer)
 
 
 
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