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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, 1994
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:
Selig Chemical Industries 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, 1994 and December 31, 1993
Statements of Changes in Net Assets Available for Plan Benefits for
the Year Ended December 31, 1994 and the Four-Month Period Ended
December 31, 1993.
Notes to Financial Statements
2. Exhibits
Sequentially
Numbered
The following exhibit is filed with this report: Page
23 Consent of Arthur Andersen LLP 10
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.
Selig Chemical Industires Retirement Plan
Date: July 13, 1995 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
Selig Chemical Industries Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of SELIG CHEMICAL INDUSTRIES RETIREMENT PLAN as of December 31, 1994 and 1993
and the related statements of changes in net assets available for benefits for
the year ended December 31, 1994 and the four-month period ending December 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and 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 audit provides 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 benefits of Selig Chemical
Industries Retirement Plan as of December 31, 1994 and 1993 and the changes in
net assets available for benefits for the year ended December 31, 1994 and the
four-month period ended December 31, 1993 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Fund information in the statement of
changes in net assets available for benefits is presented for the purposes of
additional analysis rather than to present the changes in net assets available
for benefits of each fund. The Fund information has been subjected to the
auditing procedures applied in the audits of the basic financial statements,
and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ Arthur Andersen
Arthur Andersen
Atlanta, Georgia
July 5, 1995
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SELIG CHEMICAL INDUSTRIES RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1994 AND 1993
1994 1993
RECEIVABLES
Employee contributions ............... $ 31,278 $ 25,846
INVESTMENTS, at market value (Note 1):
Stable value fund .................... 2,501,390 0
Balanced fund ........................ 1,921,061 0
Diversified equity fund .............. 1,671,435 0
NSI common stock ..................... 268,994 0
Loans to participants ................ 214,399 0
NSI DC Fixed Income Fund ............. 0 5,884,022
6,577,279 5,884,022
NET ASSETS AVAILABLE FOR BENEFITS .... $6,608,557 $5,909,868
The accompanying notes are an integral part of these statements.
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SELIG CHEMICAL INDUSTRIES RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994 AND
THE FOUR-MONTH PERIOD ENDED DECEMBER 31, 1993
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Diversified Stable NSI Fixed
Balanced Equity Value Stock Loan Income
Fund Fund Fund Fund Fund Fund Total
NET ASSETS AVAILABLE FOR
BENEFITS, August 31, 1993 .. $ 0 $ 0 $ 0 $ 0 $ 0 $ 5,960,208 $ 5,960,208
Contributions .............. 0 0 0 0 0 113,195 113,195
Net gain from investments in
the DC Fixed Income Fund ... 0 0 0 0 0 164,849 164,849
Benefit Payments ........... 0 0 0 0 0 (328,384) (328,384)
NET ASSETS AVAILABLE FOR
BENEFITS, December 31, 1993 0 0 0 0 0 5,909,868 5,909,868
Contributions .............. 136,076 158,640 190,466 40,951 0 28,227 554,360
Net gain from investments .. 42,436 (15,592) 235,910 8,735 6,343 340 278,172
Benefit payments ........... (11,583) (12,046) (106,409) (1,897) 0 (1,908) (133,843)
Intraplan transfers ........ 1,763,166 1,551,734 2,188,796 224,775 208,056 (5,936,527) 0
NET ASSETS AVAILABLE FOR
BENEFITS, December 31, 1994. $ 1,930,095 $ 1,682,736 $ 2,508,763 $ 272,564 $214,399 $ 0 $ 6,608,557
</TABLE>
The accompanying notes are an integral part of these statements.
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accounts of the Selig Chemical Industries (the "Company") Retirement Plan
(the "Plan"), 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 Defined Contribution Fixed Income Fund
As of January 1, 1993, 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. The net
gain from investments in the DC Fixed Income Fund in the accompanying Statements
of Changes in Net Assets Available for Plan Benefits reflects interest income on
guaranteed investment contracts and master notes.
Effective January 1, 1994, participants of the Plan can direct the investment of
their accounts into the various options discussed in Note 4. Prior to January 1,
1994, the assets of the Plan were invested at the discretion of the Investment
Committee.
Summarized financial information of the DC Fixed Income Fund for the period
September 1, 1993 to December 31, 1993, is presented as follows:
Interest and dividend income ................... $ 1,464,731
Investment management fees ..................... (6,775)
Net gain from investments in the DC fixed income
fund during the period ......................... $ 1,457,956
Allocation to NSI plans for the period September 1, 1993 through December 31,
1993:
Selig Chemical Industries Retirement Plan $ 164,849
All other NSI plans ............................ 1,293,107
Total .......................................... $1,457,956
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DC fixed income fund investments at December 31, 1993:
Guaranteed investment contracts $36,541,338
Master notes .................. 16,618,541
Cash .......................... 22,953
Accrued investment income ..... 9,817
Total investments ............. $53,192,649
Allocation to NSI Plans, based on participant balances, as at December 31, 1993:
Selig Chemical Industries Retirement Plan.... $ 5,884,022 11.07%
All Other NSI Plans.......................... 47,308,627 88.93
$53,192,649 100.00%
Effective January 1, 1994, the Plan's assets were invested in a Defined
Contribution Master Trust ("DC Master Trust"). Investments of the DC Master
Trust 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 managers to
invest under the general DC master Trust guidelines.
Summarized financial information of the DC Master Trust for 1994 is presented as
follows:
Interest and dividend income ................. $ 6,119,451
Net appreciation in market value ............. (387,149)
Expenses ..................................... (221,747)
Net gain from investments in the NSI DC Master
Trust ........................................ $ 5,510,555
Allocation to NSI Plans:
Selig Chemical Industries Retirement Plan..... $ 278,172
All other NSI plans .......................... 5,232,383
Total ........................................ $5,510,555
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NSI DC Master Trust investments are as follows:
Equity investment funds .............................. $ 66,145,415
Guaranteed investment contracts ...................... 52,672,980
Loans receivable ..................................... 5,145,365
NSI common stock ..................................... 4,925,868
Demand notes ......................................... 3,343,227
132,232,855
Accrued income ....................................... 74,167
Receivables .......................................... 7,738
Payables ............................................. (149,089)
$ 132,165,671
Allocation to NSI plans based on participant balances:
Selig Chemical Industries Retirement Plan ............ $ 6,577,279
All other NSI plans .................................. 125,588,392
Total ................................................ $ 132,165,671
Tax Status
The Plan has received a favorable determination letter from the Internal Revenue
Service dated September 30, 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, 1994.
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 assets discussed in Note ).
Certain officers of NSI were appointed administrators of the Plan's assets
together with the income derived therefrom.
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 September 1, 1989, and as further
amended through January 1, 1994, incorporates the requirements of
Sections 401(a) and 501(a) of the Internal Revenue Code of 1986 and the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended from time to time.
The Plan is a voluntary, defined contribution plan covering all employees of the
Company who have attained the age of 21 with one year of service during which at
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least 1,000 hours of employment are completed. Prior to January 1, 1994,
employees need six consecutive months of service during which at least 500 hours
of employment are completed. Contributions are made by the Company and
participants of the Plan. The company contributes an amount equal to 5% of net
profits, as defined. Participants contribute between 2% and 15% (between 2% and
8% prior to January 1, 1994) of their before tax compensation but not to exceed
$8,994 (or such larger amount as may be determined by the Secretary of Treasury)
for any participant in any plan year. 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. Forfeitures of employer
contributions are allocated among the remaining participants. Participants are
always fully vested in their individual contributions. All expenses of the Plan
are paid by the Company.
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 December 31, 1994 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.
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.
4. PLAN INVESTMENT OPTIONS
The separate investment funds made available under the Plan may be changed,
eliminated, or modified from time to time by the Investment Committee. The
separate investment funds offered by the Plan are:
*Diversified Equity Fund. This fund is a diversified stock fund designed to
invest in a broad range of common stocks providing capital growth.
*Stable Value Fund. This is a fixed income fund which is designed to provide a
steady level of current income while focusing on preservation of principal.
*Balanced Fund. This fund is invested in a changing mix of high quality stocks
and bonds. The fund is designed to provide capital growth and current income
while limiting the risk of principal loss.
*NSI Stock Fund. This fund is invested in NSI common stock, although it may hold
other short-term investments from time to time.
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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 Selig Chemical Industries
Retirement Plan.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
July 13, 1995
