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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 for Contract Employees
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
for Contract Employees
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
for Contract Employees:
We have audited the accompanying statements of net assets available
for plan benefits of the ZEP MANUFACTURING COMPANY PROFIT
SHARING/401(k) RETIREMENT PLAN FOR CONTRACT EMPLOYEES 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 for Contract Employees 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
FOR CONTRACT EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31,1993 AND AUGUST 31, 1993
December 31, 1993 August 31, 1993
RECEIVABLES:
Employer $ 0 $ 17,094
Employee 0 7,255
--------- ---------
Total Receivables 0 24,349
--------- ---------
INVESTMENTS, at market value
(Note 1):
NSI DC Fixed Income Fund 2,928,166 2,848,109
NSI DC Zep Equity Fund 1,420,144 1,424,132
NSI Common Stock 431,064 428,961
---------- ----------
Total Investments 4,779,374 4,701,202
---------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 4,779,374 $ 4,725,551
========= =========
The accompanying notes are an integral
part of these statements.
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ZEP MANUFACTURING COMPANY
PROFIT SHARING/401(k) RETIREMENT PLAN
FOR CONTRACT EMPLOYEES
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 $ 207,419
Employee 85,629 94,498
--------- ---------
85,629 301,917
--------- ---------
NET GAIN FROM INVESTMENTS IN:
NSI DC Fixed Income Fund (Note 1) 80,057 140,059
NSI DC Zep Equity Fund (Note 1) 22,006 93,517
NSI Common Stock (Note 1) 2,103 25,233
FIF Units (Note 1) 0 70,082
MIF Units (Note 1) 0 102,084
--------- ---------
104,166 430,975
--------- ---------
DIVIDENDS ON COMMON STOCK (Note 1) 4,402 17,327
INTEREST INCOME 0 9
--------- ---------
4,402 17,336
--------- ---------
AMOUNTS PAID TO PARTICIPANTS <135,835> <130,026>
--------- ---------
TRANSFER TO ZEP I PLAN <4,539> 0
--------- ---------
INCREASE IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS 53,823 620,202
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF PERIOD 4,725,551 4,105,349
--------- ---------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF PERIOD $ 4,779,374 $ 4,725,551
========= =========
The accompanying notes are an integral
part of these statements.
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ZEP MANUFACTURING COMPANY
PROFIT SHARING/401(k) RETIREMENT PLAN
FOR CONTRACT EMPLOYEES
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 for Contract Employees (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 are 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 for
Contract Employees $ 70,082
All other NSI plans 1,704,842
---------
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
for Contract Employees $ 102,084
All other NSI plans 8,802,660
---------
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
for Contract Employees $ 80,057 $ 140,059
All other NSI plans 1,377,899 2,361,648
--------- ---------
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 for
Contract Employees $ 2,928,166 5.50% $ 2,848,109 5.48%
All other NSI Plans 50,264,483 94.50% 49,139,913 94.52%
----------- ------ ----------- ------
$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. 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
for Contract Employees $ 22,006 $ 93,517
Zep Manufacturing Company Profit
Sharing/401(k) Retirement Plan 290,617 1,286,639
------- ---------
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)
Retirement Plan for
Contract Employees $ 1,420,144 6.55% $ 1,424,132 6.86%
Zep Manufacturing Company
Profit Sharing/401(k) 20,253,321 93.45% 19,311,401 93.14%
Retirement Plan
----------- ------ ----------- ------
$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 not received a favorable determination letter from the
Internal Revenue Service. However, the plan administrator believes
that the Plan is currently designed and is being operated in
compliance with the applicable requirements of the Internal Revenue
Code. Therefore, the plan administrator believes that the Plan was
tax-exempt as of December 31, 1993.
Net Assets Available for Plan Benefits -
At August 31, 1993, $26,085 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 was established as a spin-off from the Zep
Manufacturing Company Profit Sharing Retirement Plan (the "Prior
Plan") to cover all eligible hourly paid employees represented by a
collective bargaining unit. The Plan is a voluntary, defined
contribution plan covering all union employees of the Company, who
have attained the age of 21, with at least six months of service, as
defined. 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 are made by the Company in an amount
equal to the same percentage of compensation of participants under
this Plan as employer contributions to the Prior Plan bears to the
total compensation of the eligible employees who are participants
under the Prior Plan. The Company contributes 5% of net profits, as
defined. 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. Vesting of employer contributions 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 for Contract Employees.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Atlanta, Georgia
June 28, 1994
