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Exhibit Index on Page 2
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED].
For the fiscal year ended: December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
Commission file number 1- 3208
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Zep Manufacturing Company Profit Sharing/401(k)
Retirement Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of the principal executive office:
National Service Industries, Inc.
1420 Peachtree Street, NE
Atlanta, Georgia 30309
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REQUIRED INFORMATION
The following documents are filed as a part of this report:
1. Financial Statements
Plan financial statements prepared in accordance with
the financial reporting requirements of ERISA include the following:
Report of Independent Public Accountants
Statements of Net Assets Available for Plan Benefits as of December
31, 1993 and August 31, 1993
Statements of Changes in Net Assets Available for Plan Benefits for
the Four-Month Period Ended December 31, 1993 and the Year Ended
August 31, 1993
Notes to Financial Statements
2. Exhibits
Sequentially
Numbered
The following exhibit is filed with this report: Page
23 Consent of Arthur Andersen & Co. 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
Zep Manufacturing Company
Profit Sharing/401(k) Retirement Plan
Date: June 28, 1994 By: National Service Industries, Inc.
Plan Administrator
By: /s/ D. Raymond Riddle
Name: D. Raymond Riddle
Title: President and Chief Executive Officer
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
Zep Manufacturing Company
Profit Sharing/401(k) Retirement Plan:
We have audited the accompanying statements of net assets available
for plan benefits of the ZEP MANUFACTURING COMPANY PROFIT
SHARING/401(k) RETIREMENT PLAN as of December 31, 1993 and August 31,
1993 and the related statements of changes in net assets available for
plan benefits for the four-month period ended December 31, 1993 and
the year ended August 31, 1993. These financial statements are the
responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan amd perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Zep manufacturing Company Profit Sharing/401(k)
Retirement Plan as of December 31, 1993 and August 31, 1993 and the
changes in net assets available for plan benefits for the four-month
period ended December 31, 1993 and the year ended August 31, 1993 in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Atlanta, Georgia
June 6, 1994
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ZEP MANUFACTURING COMPANY
PROFIT SHARING/401(k) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993 AND AUGUST 31, 1993
December 31, 1993 August 31, 1993
RECEIVABLES:
Employer $ 0 $ 138,309
Employee 0 133,881
---------- ----------
Total Receivables 0 272,190
---------- ----------
INVESTMENTS, at market value
(Note 1):
NSI DC Fixed Income Fund 40,253,727 39,153,272
NSI DC Zep Equity Fund 20,253,321 19,311,401
NSI Common Stock 5,923,897 5,895,000
---------- ----------
Total Investments 66,430,945 64,359,673
---------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $ 66,430,945 $ 64,631,863
========== ==========
The accompanying notes are an integral
part of these statements.
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ZEP MANUFACTURING COMPANY
PROFIT SHARING/401(k) RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE FOUR MONTH PERIOD ENDED DECEMBER 31, 1993
AND THE YEAR ENDED AUGUST 31, 1993
Four Month
Period Ended Year Ended
December 31, 1993 August 31, 1993
CONTRIBUTIONS (Note 3):
Employer $ 0 $ 1,678,210
Employee 1,176,449 2,619,010
---------- ----------
1,176,449 4,297,220
---------- ----------
NET GAIN FROM INVESTMENTS IN:
NSI DC Fixed Income Fund (Note 1) 1,100,455 1,924,566
NSI DC Zep Equity Fund (Note 1) 290,617 1,286,639
NSI Common Stock (Note 1) 28,897 346,765
FIF Units (Note 1) 0 963,443
MIF Units (Note 1) 0 1,347,296
---------- ----------
1,419,969 5,868,709
---------- ----------
DIVIDENDS ON COMMON STOCK (Note 1) 60,495 238,111
INTEREST INCOME 0 140
---------- ----------
60,495 238,251
---------- ----------
AMOUNTS PAID TO PARTICIPANTS <862,370> <1,405,135>
---------- ----------
TRANSFER FROM ZEP PLAN II 4,539 0
---------- ----------
INCREASE IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS 1,799,082 8,999,045
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF PERIOD 64,631,863 55,632,818
---------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF PERIOD $66,430,945 $64,631,863
========== ==========
The accompanying notes are an integral
part of these statements.
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ZEP MANUFACTURING COMPANY
PROFIT SHARING/401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 AND AUGUST 31, 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting -
The accounts of the Zep Manufacturing Company Profit Sharing/401(k)
Retirement Plan (the "Plan") of Zep Manufacturing Company (the
"Company"), a division of National Service Industries, Inc. (NSI), are
maintained by the trustee on the cash basis of accounting. The
accompanying financial statements have been prepared using the accrual
method of accounting by application of memorandum entries.
Investment in NSI Fixed Income Fund -
A portion of the Plan's assets were commingled in a Fixed Income Fund
(FIF) together with the assets of certain pension and profit sharing
plans of other NSI divisions. Investments of the FIF were reflected at
market values determined by the custodian from publicly stated price
information. These investments were subject to certain administrative
guidelines and limitations as to type and amount of securities held.
The net gain from investments in FIF units in the accompanying
Statements of Changes in Net Assets Available for Plan Benefits
reflects interest income on guaranteed investment contracts and master
notes. On January 1, 1993, investments of this fund were reinvested in
the NSI Defined Contribution Fixed Income Fund.
Summarized financial information of the FIF for the period September 1,
1992 to December 31, 1992 is presented as follows:
1992
Net gain from investments in
FIF units during the period $ 1,774,924
=========
Allocation to NSI plans (based on
number of units owned):
Zep Manufacturing Company Profit
Sharing/401(k) Retirement Plan $ 963,443
All other NSI plans 811,481
---------
Total $ 1,774,924
=========
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Investment in NSI Master Investment Fund -
A portion of the Plan's assets were commingled in a Master Investment
Fund (MIF) together with the assets of pension and profit sharing
plans of other NSI divisions. Investments of the MIF were reflected at
market values determined by the custodian from publicly stated price
information. These investments are subject to certain administrative
guidelines and limitations as to type and amount of securities held.
Certain fund assets are allocated to selected independent investment
managers to invest under the general MIF guidelines. On January 1,
1993 investments of this fund were reinvested in the NSI Defined
Contribution Zep Equity Fund.
Summarized financial information of the MIF for the period September 1,
1992 to December 31, 1992, is presented as follows:
1992
Interest and dividend income $ 3,550,017
Net realized and unrealized appreciation
in market value of investments 5,633,296
Investment management fees <278,569>
---------
Net gain from investments in MIF
units during the period $ 8,904,744
=========
Allocation to NSI plans (based on
number of units owned):
Zep Manufacturing Company Profit
Sharing/401(k) Retirement Plan $ 1,347,296
All other NSI plans 7,557,448
---------
Total $ 8,904,744
=========
Investment in NSI Defined Contribution Fixed Income Fund -
As of January 1, 1993, a portion of the Plan's assets were commingled in
a Defined Contribution Fixed Income Fund (DC Fixed Income Fund)
together with the assets of certain profit sharing plans of other NSI
divisions. Investments of the DC Fixed Income Fund are reflected at
market values determined by the custodian from publicly stated price
information. These investments are subject to certain administrative
guidelines and limitations as to type and amount of securities held.
Certain fund assets are allocated to selected independent investment
managers to invest under the general DC Fixed Income Fund guidelines.
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Summarized financial information of the DC Fixed Income Fund is
presented as follows:
September 1, 1993 January 1, 1993
to to
December 31, 1993 August 31, 1993
Interest and dividend income $ 1,464,731 $ 2,507,338
Investment management fees <6,775> <5,631>
--------- --------
Net gain from investments in the
DC Fixed Income Fund during
the period $ 1,457,956 $ 2,501,707
========= =========
Allocation to NSI plans:
Zep Manufacturing Company Profit
Sharing/401(k) Retirement Plan $ 1,100,455 $ 1,924,566
All other NSI plans 357,501 577,141
--------- ---------
Total $ 1,457,956 $ 2,501,707
========= =========
DC FIXED INCOME FUND INVESTMENTS:
December 31, 1993 August 31, 1993
Guaranteed Investment Contracts $ 36,541,338 $ 50,929,142
Master Note 16,618,541 1,052,739
Cash 22,953 6,141
Accrued investment income 9,817 0
---------- ----------
Total investments $ 53,192,649 $ 51,988,022
========== ==========
Allocation to NSI Plans (based on
participant balances):
December 31, 1993 August 31,1993
Zep Manufacturing Company
Profit Sharing/401(k)
Retirement Plan $40,253,727 75.67% $39,153,272 75.31%
All Other NSI Plans 12,938,922 24.33% 12,834,750 24.69%
----------- ------ ----------- ------
$53,192,649 100.00% $51,988,022 100.00%
=========== ====== =========== ======
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Investment in NSI Defined Contribution Zep Equity Fund -
As of January 1, 1993, a portion of the Plan's assets were placed in the
Defined Contribution Zep Equity Fund (DC Zep Equity Fund) together
with the assets of Zep Manufacturing Company Profit Sharing/401(k)
Retirement Plan for Contract Employees. Investments of the DC Zep
Equity Fund are reflected at market values determined by the custodian
from publicly stated price information. These investments are subject
to certain administrative guidelines and limitations as to type and
amount of securities held. Certain fund assets are allocated to
selected independent investment managers to invest under the general
DC Zep Equity Fund guidelines.
Summarized financial information of the DC Zep Equity Fund is presented
as follows:
September 1, 1993 January 1, 1993
to to
December 31, 1993 August 31, 1993
Interest and dividend income $ 405,744 $ 248,921
Net realized and unrealized
(depreciation) appreciation
in market value of investments <90,708> 1,137,575
Investment management fees <4,393> <6,340>
------- ---------
Net gain from investments in the DC
Zep Equity Fund during the period $ 312,623 $ 1,380,156
======= =========
Allocation to NSI plans:
Zep Manufacturing Company Profit
Sharing/401(k) Retirement Plan $ 290,617 $ 1,286,639
Zep Manufacturing Company Profit
Sharing/401(k) Retirement Plan
for Contract Employees 22,006 93,517
------- ---------
Total $ 312,623 $ 1,380,156
======= =========
DC ZEP EQUITY FUND INVESTMENTS:
December 31, 1993 August 31, 1993
Common Stock $ 0 $ 20,728,390
Master Note 199,058 7,119
Receivable from Pending Sales 21,474,407 24
---------- ----------
Total investments $ 21,673,465 $ 20,735,533
========== ==========
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ALLOCATION TO NSI PLANS (based on
participant balances):
December 31, 1993 August 31, 1993
Zep Manufacturing Company
Profit Sharing/401(k) $ 20,253,321 93.45% $ 19,311,401 93.14%
Retirement Plan
Zep Manufacturing Company
Profit Sharing/401(k)
Retirement Plan for 1,420,144 6.55% 1,424,132 6.86%
Contract Employees
------------ ------ ------------ ------
$ 21,673,465 100.00% $ 20,735,533 100.00%
============ ====== ============ ======
Investment in NSI Common Stock -
As of December 31, 1993, approximately 9% of the Plan's net assets were
invested in common stock of NSI, a party-in-interest. The Plan's
investment in NSI common stock was reflected at market value in the
accompanying financial statements.
Tax Status -
The Plan has received a favorable determination letter from the Internal
Revenue Service dated January 24, 1986, and is qualified under the
Internal Revenue Code (the "Code") as exempt from federal income
taxes. The Plan has been amended and restated since receiving the
determination letter. However, the plan administrator believes that
the Plan is currently designed and is being operated in compliance
with the applicable requirements of the Code. Therefore, the plan
administrator believes that the Plan was qualified and that the
related trust was tax-exempt as of December 31, 1993.
Net Assets Available for Plan Benefits -
At August 31, 1993, $88,003 of net assets available for plan benefits
were allocated to accounts of participants who have withdrawn from
participating in the earnings and operations of the Plan. There were
no such amounts allocated at December 31, 1993.
2. TRUST AGREEMENT:
Under a trust agreement dated September 1, 1993, as amended, Wachovia Bank
of Georgia, N.A. was appointed trustee of the NSI Defined Contribution
Plans Master Trust (which includes the DC Fixed Income Fund, DC Zep
Equity Fund and Common Stock discussed in Note 1). Certain officers of
NSI were appointed administrators of the Plan's assets together with the
income derived therefrom.
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Prior to September 1, 1993, the assets of the Plan were included in the
NSI General Retirement Trust (GRT). Under a trust agreement dated March
1, 1978, certain officers of NSI were appointed trustee of the GRT and
were administrators of the Plan's assets and Wachovia Bank of Georgia
was the custodian.
3. PLAN DESCRIPTION:
The following brief description of the Plan is provided for informational
purposes only. Participants should refer to the Plan agreement for more
complete information.
The Plan, as amended and restated effective February 1, 1988, incorporates
the required standards under ERISA. The Plan is a voluntary, defined
contribution plan covering all non-union employees of the Company, who
have attained the age of 21, with at least six months of service.
Participants may contribute between 1% and 10% of before-tax
compensation but not to exceed $7,000 (or such larger amount as may be
determined by the Secretary of Treasury) for any participant in any
calendar year. Contributions, which are allocated to salaried and
commissioned participants, are made by the Company in an amount equal to
5% of net profits, as defined. In addition, the Company contributes an
amount equal to the same percentage of compensation of non-union hourly
employees as the 5% bears to the total remuneration of salaried and
commissioned participants. The total of these amounts can be increased
for any additional discretionary amount determined by the Board of
Directors of NSI. The maximum compensation with respect to any
participant for purposes of employer contributions to the Plan is
$35,000.
During December, 1993, the Plan was amended and restated to allow
participant directed investments effective January 1, 1994. In addition,
the Plan year end was changed from August 31 to December 31. Thus, the
accompanying financial statements are for the year ended August 31, 1993
and the four month period in the short plan year ended December 31,
1993. The Plan, as amended and restated, does not permit employer
contributions during the short plan year.
Non-vested employer contributions are forfeited upon withdrawal
or termination, as defined, from the Plan and are allocated to
remaining participants. All expenses of the Plan were paid by
the Company during 1993 and 1992. Vesting of employer con-
tributions occurs on an increasing scale ranging from 20%
vesting after three years of service, as defined, to 100%
vesting after seven years of service. Participants are always
fully vested in their individual contributions.
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Although the Company intends for the Plan to be permanent, the Plan
provides that the Company has the right to discontinue contributions or
to terminate the Plan at any time. In the event of termination, each
participant shall be vested with the balance of his account and his
proportionate share of any future adjustments or forfeitures.
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Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K into National Service Industries, Inc.'s
previously filed Registration Statement covering the Zep Manufacturing Company
Profit Sharing/401(k) Retirement Plan.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Atlanta, Georgia
June 28, 1994
