Page 1 of 20
Exhibit Index on Page 12
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For quarter ended May 31, 1997 Commission file number 1-3208
NATIONAL SERVICE INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 58-0364900
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
1420 Peachtree Street, N. E., Atlanta, Georgia 30309-3002
(Address of Principal Executive Offices) (Zip Code)
(404) 853-1000
(Registrant's Telephone Number, Including Area Code)
None
(Former Name, Former Address and Former Fiscal Year, if Changed Since 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 -
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date (applicable only to corporate
issuers).
Common Stock - $1.00 Par Value - 45,085,188 shares as of June 27, 1997.
Page 2
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS -
MAY 31, 1997 AND AUGUST 31, 1996 3
CONSOLIDATED STATEMENTS OF INCOME -
THREE MONTHS AND NINE MONTHS ENDED
MAY 31, 1997 AND 1996 4
CONSOLIDATED STATEMENTS OF CASH FLOWS -
NINE MONTHS ENDED MAY 31, 1997 AND 1996 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6-7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8-9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
EXHIBIT INDEX 12
Page 3
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per-share data)
May 31, August 31,
1997 1996
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents .......................... $ 39,431 $ 58,662
Short-term investments ............................. 553 551
Receivables, less reserves for doubtful
accounts of $7,343 at May 31, 1997
and $5,807 at August 31, 1996 .................... 261,990 269,971
Inventories, at the lower of cost (on a
first-in, first-out basis) or market ............. 166,722 169,813
Linens in service, net of amortization ............. 97,470 97,710
Deferred income taxes .............................. 4,145 2,152
Prepayments ........................................ 9,575 7,522
Total Current Assets ............................. 579,886 606,381
Property, Plant, and Equipment, at cost:
Land ............................................... 28,049 29,062
Buildings and leasehold improvements ............... 188,425 194,219
Machinery and equipment ............................ 535,820 542,056
Total Property, Plant, and Equipment ............. 752,294 765,337
Less - Accumulated depreciation and
amortization ..................................... 401,730 407,941
Property, Plant, and Equipment - net ........... 350,564 357,396
Other Assets:
Goodwill and other intangibles ..................... 102,275 89,427
Other .............................................. 36,977 41,442
Total Other Assets ............................... 139,252 130,869
Total Assets ................................... $1,069,702 $1,094,646
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt ............... $ 5,566 $ 46
Notes payable ...................................... 5,998 6,696
Accounts payable ................................... 88,016 79,851
Accrued salaries, commissions, and bonuses ......... 34,824 42,788
Current portion of self insurance reserves ......... 15,591 15,396
Other accrued liabilities .......................... 42,495 52,649
Total Current Liabilities ........................ 192,490 197,426
Long-Term Debt, less current maturities .............. 26,236 24,920
Deferred Income Taxes ................................ 56,937 63,347
Self Insurance Reserves, less current portion ........ 61,827 63,369
Other Long-Term Liabilities .......................... 28,873 27,576
Stockholders' Equity:
Series A participating preferred stock,
$.05 stated value, 500,000 shares
authorized, none issued
Preferred stock, no par value, 500,000 shares
authorized, none issued
Common stock, $1 par value, 80,000,000 shares
authorized, 57,918,978 shares issued at May
31, 1997 and August 31, 1996 ..................... 57,919 57,919
Paid-in capital .................................... 12,646 11,021
Retained earnings .................................. 825,641 791,367
896,206 860,307
Less - Treasury stock, at cost (12,762,340
shares at May 31, 1997 and 11,447,036 shares
at August 31, 1996) .............................. 192,867 142,299
Total Stockholders' Equity ................... 703,339 718,008
Total Liabilities and Stockholders's Equity. $1,069,702 $1,094,646
The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.
Page 4
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts in thousands, except per-share data)
THREE MONTHS ENDED NINE MONTHS ENDED
MAY 31 MAY 31
1997 1996 1997 1996
Sales and Service Revenues:
Net sales of products $ 383,493 $ 381,114 $ 1,136,640 $ 1,093,359
Service revenues 131,786 135,756 389,768 398,267
Total Revenues 515,279 516,870 1,526,408 1,491,626
Costs and Expenses:
Cost of products sold 231,601 237,414 703,518 691,951
Cost of services 72,814 77,078 223,589 226,292
Selling and administrative expenses 160,961 157,395 474,491 460,438
Interest expense, net 1,705 1,082 4,646 3,180
Other expense (income), net 1,390 (435) 1,829 (2,386)
Total Costs and Expenses 468,471 472,534 1,408,073 1,379,475
Income before Provision for Income Taxes 46,808 44,336 118,335 112,151
Provision for (Benefit from) Income Taxes:
Current 21,132 15,779 46,097 42,997
Deferred (3,758) 880 (2,375) (1,042)
17,374 16,659 43,722 41,955
Net Income $ 29,434 $ 27,677 $ 74,613 $ 70,196
Per Share:
Net income $.65 $.58 $1.64 $1.46
Cash dividends $.30 $.29 $.89 $.86
Weighted Average Number of Shares
Outstanding (thousands) 44,996 48,059 45,371 48,240
The accompanying notes to consolidated financial statements are an integral part
of these statements.
Page 5
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)
NINE MONTHS ENDED
MAY 31
1997 1996
Cash Provided by (Used for) Operating Activities:
Net income ........................................... $ 74,613 $ 70,196
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization .................... 44,449 44,184
Provision for losses on accounts receivable ...... 2,654 3,509
Gain on the sale of property, plant, and equipment (198) (1,718)
Gain on the sale of business ..................... (972) (2,946)
Change in noncurrent deferred income taxes ....... (2,375) (1,042)
Change in assets and liabilities net of effect
of acquisitions and sale of business-
Receivables .................................. 914 6,311
Inventories and linens in service, net ....... 3,347 799
Current deferred income taxes ................ (1,994) 3,076
Prepayments and other ........................ (1,699) (2,375)
Accounts payable and accrued liabilities ..... (15,067) (23,771)
Changes in self insurance reserves and other
long-term liabilities ....................... (2,306) 2,674
Net Cash Provided by Operating Activities .. 101,366 98,897
Cash Provided by (Used for) Investing Activities:
Change in short-term investments ..................... (2) 1,047
Purchase of property, plant, and equipment ........... (34,215) (48,367)
Sale of property, plant, and equipment ............... 3,170 5,177
Sale of business ..................................... 31,380 11,517
Acquisitions, net of cash acquired ................... (4,320) (600)
Change in other assets ............................... 4,439 (65)
Net Cash Provided by (Used for) Investing Activities 452 (31,291)
Cash Provided by (Used for) Financing Activities:
Change in notes payable .............................. (10,796) 130
Additions to long-term debt .......................... 7,554 --
Repayment of long-term debt .......................... (6,692) (72)
Recovery of investment in tax benefits ............... 661 1,290
Deferred income taxes from investment in tax benefits (1,972) (3,205)
Purchase of treasury stock ........................... (69,465) (23,262)
Cash dividends paid .................................. (40,657) (41,458)
Net Cash Used for Financing Activities ............. (121,367) (66,577)
Effect of Exchange Rate Changes on Cash ................ 318 (1,124)
Net Change in Cash and Cash Equivalents ................ (19,231) (95)
Cash and Cash Equivalents at Beginning of Year ......... 58,662 79,402
Cash and Cash Equivalents at End of Period ............. $ 39,431 $ 79,307
Supplemental Cash Flow Information:
Income taxes paid during the period .................. $ 41,744 $ 44,791
Interest paid during the period ...................... 4,074 3,026
Noncash Investing and Financing Activities:
Noncash aspects of sale of business -
Receivables incurred .............................. $ (391) $ --
Liabilities removed ................................ (477) --
Noncash Aspects of Acquisitions:
Liabilities assumed or incurred ...................... $ (22,440) $ 6
Treasury stock issued ................................ 20,522 --
The accompanying notes to consolidated financial statements are an integral part
of these statements.
Page 6
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. BASIS OF PRESENTATION:
The interim consolidated financial statements included herein have been prepared
by the company without audit and the consolidated balance sheet as of August 31,
1996 has been derived from audited statements. These statements reflect all
adjustments, all of which are of a normal, recurring nature, which are, in the
opinion of management, necessary to present fairly the consolidated financial
position as of May 31, 1997, the consolidated results of operations for the
three months and nine months ended May 31, 1997 and 1996, and the consolidated
cash flows for the nine months ended May 31, 1997 and 1996. 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 are adequate to make the
information presented not misleading. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1996.
The results of operations for the nine months ended May 31, 1997 are not
necessarily indicative of the results to be expected for the full fiscal year
because the company's revenues and income are generally higher in the second
half of its fiscal year and because of the uncertainty of general business
conditions.
2. BUSINESS SEGMENT INFORMATION:
Three Months Ended May 31
Sales and Service
Revenues Operating Profit
1997 1996 1997 1996
(In thousands)
Lighting Equipment $ 237,775 $ 219,904 $ 23,662 $ 21,596
Textile Rental 131,786 135,756 14,040 11,519
Chemical 109,813 95,657 9,438 9,394
Envelopes 34,404 32,791 2,969 2,591
Other 1,501 32,762 472 1,941
$ 515,279 $ 516,870 50,581 47,041
Corporate (2,671) (2,276)
Interest expense, net (1,102) (429)
Total $ 46,808 $ 44,336
Nine Months Ended May 31
Sales and Service
Revenues Operating Profit
1997 1996 1997 1996
(In thousands)
Lighting Equipment $ 688,943 $ 634,636 $ 65,679 $ 51,750
Textile Rental 389,768 398,267 29,478 30,519
Chemical 292,990 272,119 26,985 25,321
Envelopes 99,165 92,756 7,720 6,753
Other 55,542 93,848 1,419 3,921
$ 1,526,408 $ 1,491,626 131,281 118,264
Corporate (10,244) (5,086)
Interest expense, net (2,702) (1,027)
Total $ 118,335 $ 112,151
Page 7
NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
3. INVENTORIES
Major classes of inventory as of May 31, 1997 and August 31, 1996 were as
follows:
May 31, August 31,
1997 1996
(In thousands)
Raw Materials and Supplies ................... $ 66,729 $ 73,236
Work-in-Process .............................. 8,744 9,679
Finished Goods ............................... 91,249 86,898
Total ................................... $166,722 $169,813
4. NEW ACCOUNTING STANDARDS
During the first quarter of fiscal 1997, the company adopted Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." SFAS No. 121
requires that long-lived assets and certain intangibles be reviewed whenever
events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable. The adoption of SFAS No. 121 did not have a significant
impact on the company's financial statements.
In February, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share." SFAS No. 128
supersedes APB 15, "Earnings per Share" and promulgates new accounting standards
for the computation and manner of presentation of the company's earnings per
share. The company is required to adopt the provisions of SFAS No. 128 for the
quarter ending February 28, 1998. Earlier application is not permitted; however,
upon adoption the company will be required to restate previously reported annual
and interim earnings per share in accordance with the provisions of SFAS No.
128. The adoption of SFAS No. 128 will not have a material impact on the
computation or manner of presentation of the company's earnings per share as
currently or previously presented under APB 15. The following table represents a
reconciliation of basic and diluted weighted average shares and a pro forma
calculation of earnings per share using the guidelines of SFAS No. 128.
Three Months Ended Nine Months Ended
May 31 May 31
1997 1996 1997 1996
(In thousands, except per-share data)
Basic weighted average shares outstanding ... 44,996 48,059 45,371 48,240
Add: Shares of common stock assumed issued
upon exercise of stock options using
the "Treasury Stock" method as it
applies to the computation of
diluted earnings per share ............ 352 323 292 225
Diluted weighted average shares outstanding . 45,348 48,382 45,663 48,465
Net earnings used in the computation of basic
and diluted earnings per share .............. $29,434 $27,677 $74,613 $70,196
Earnings per Share:
Basic ............................. $ .65 $ .58 $ 1.64 $ 1.46
Diluted ........................... $ .65 $ .57 $ 1.63 $ 1.45
5. RECLASSIFICATIONS
Certain amounts in the 1996 financial statements and notes have been
reclassified to conform with the 1997 presentation.
Page 8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and related notes.
Financial Condition
National Service Industries' financial position remained strong at May 31, 1997.
Net working capital was $387.4 million, compared with $409.0 million at August
31, 1996, and the current ratio was 3.0, compared with 3.1 at year end. Cash and
short-term investments were $40.0 million compared with $59.2 million at August
31. For the nine months ended May 31, the company invested $38.5 million in
capital expenditures and acquisitions. The percent of debt to total
capitalization was 5.1 percent, up from 4.2 percent at August 31. Cash provided
by operating activities was $101.4 million, up from $98.9 million for the first
nine months last year.
Capital expenditures, exclusive of acquisition spending, were $34.2 million for
the first nine months this year and $48.4 million for the same period a year
ago. The lighting equipment segment invested in facility improvements, equipment
replacements, process improvements, and tooling for new products, and textile
rental segment spending consisted primarily of improvement of facilities and
replacement of equipment. Prior-year spending included the lighting equipment
segment's expansion of the Mexican production facility, equipment replacements,
process improvements and tooling for new products and the textile rental
segment's replacement and improvement of facilities, equipment and vehicles.
Current-year acquisition spending of $4.3 million was the result of: the
chemical segment's purchase of chemical products companies in Ohio and Canada;
the lighting equipment segment's acquisition of Lumaid, Inc., a small emergency
lighting products manufacturer in Canada; and the third quarter acquisition for
$20.5 million in stock of Enforcer Products, Inc., a specialty chemical company
with a retail focus. Acquisition spending was minimal in the prior-year period.
Cash from divestitures totaled $31.4 million for the nine months this year.
During the second quarter, the insulation business was sold for $27.1 million.
The textile rental segment divested non-strategic businesses in both the current
and prior-year periods, generating cash of $4.3 million and $11.5 million,
respectively. During the third quarter, the company agreed to sell, at a gain,
29 uniform and linen plants to G&K Services, Inc. The sale was completed
during the fourth quarter for $280 million in cash, subject to a post-closing
adjustment.
Dividend payments totaled $40.7 million, or 89 cents per share, compared with
$41.5 million, or 86 cents per share, for the prior-year period. Effective
January, 1997, the regular quarterly dividend rate was increased 3.4 percent to
30 cents per share, or an annual rate of $1.20 per share. During the first half,
the company completed the repurchase of 2.0 million of its common shares. The
Board had previously clarified that the standing authority is to reduce
outstanding shares by 2.0 million per year, net of shares reissued. In
connection with the sale of the uniform and linen plants, the Board authorized
the repurchase of an additional 1.25 million shares. Combined with the standing
authority to reduce outstanding shares by 2.0 million shares per year and this
additional authorization, the company anticipates purchasing about 1.0 million
shares during each of the next four quarters.
For the periods presented, capital expenditures, working capital needs,
dividends, acquisitions, and share repurchases were financed primarily with
internally generated funds and some interim borrowing against the committed
credit facility (discussed below). European operations were supplemented by
short-term borrowings in the European market. Contractual commitments for
capital and acquisition spending during the coming twelve months total $14
million. For the current fiscal year, the company expects actual capital
expenditures to be less than levels of recent years, which, excluding
acquisition spending, were $66 million in 1996, $59 million in 1995, and $43
million in 1994. Late in fiscal 1996, the company negotiated the $250 million
multi-currency committed credit facility with eleven domestic and international
banks. The company has complimentary lines of credit totaling $132 million, of
which $110 million is available domestically and $22 million is available on a
multi-currency basis primarily from a European bank. Current liquid assets,
internally generated funds, and the available credit are expected to meet the
anticipated general operating cash requirements for the next twelve months.
Results of Operations
National Service Industries' earnings per share for the third quarter ended May
31, 1997 increased 12.1 percent to 65 cents compared with the same quarter a
year ago. Sales for the quarter decreased 0.3 percent to $515 million. Excluding
revenues associated with the previously divested insulation business, sales from
continuing operations increased 6.1 percent. Net income of $29.4 million was 6.3
percent higher than the $27.7 million reported in last year's third quarter.
Third quarter 1997 pretax earnings included gains of $2.5 million for accounting
policy changes for ancillary linen revenue and $1.8 million from improved
workers' compensation claims experience. The third quarter of 1996 included
Page 9
gains of $6.3 million from improved workers' compensation claims experience.
Earnings per share increased at a greater rate of 12.1 percent due to 3.1
million fewer average shares outstanding compared to the third quarter a year
ago.
For the first nine months of NSI's fiscal year, sales increased $34.8 million,
or 2.3 percent, to $1.5 billion. Net income increased $4.4 million, or 6.3
percent, to $74.6 million. The 1997 year to date pre-tax earnings included gains
of $1.2 million from asset sales, $5.4 million from ongoing favorable workers'
compensation claims experience and $6.1 million from changes in accounting
policy for ancillary linen revenue. Gains on asset sales were $4.6 million in
the first nine months of 1996. Earnings per share for the first nine months
increased 12.3 percent to $1.64.
The third quarter was led by the lighting equipment segment as the
non-residential construction market showed continued strength, sales through
retail stores grew and new products were introduced. Sales advanced 8.1 percent
to $238 million for the quarter and 8.6 percent to $689 million for the first
nine months. Operating income advanced 9.6 percent to $23.7 million for the
quarter and 26.9 percent to $65.7 million for the nine months as higher volumes,
a more favorable product mix, and lower manufacturing costs increased profits.
Lumaid, Inc., acquired during the first half, is reported as part of the
segment.
For the third quarter and nine months, sales in the textile rental segment were
down 2.9 percent to $132 million and 2.1 percent to $390 million, respectively,
as a result of previously divested branches. Operating income increased 21.9
percent to $14.0 million from $11.5 million in the third quarter of 1996 and
declined 3.4 percent to $29.5 million from $30.5 million last year. Operating
income for the quarter included a $1.1 million reduction in workers'
compensation self insurance reserves and $2.5 million for accounting policy
changes for ancillary linen revenue. For the first nine months, operating income
included gains of $1.3 million on asset sales, a $3.3 million reduction in
workers' compensation self insurance reserves, and $6.0 million for accounting
policy changes for ancillary linen revenue. The impact of the accounting changes
and workers' compensation adjustments is anticipated to be repeated in the
fourth quarter. The 1996 operating income included gains on asset sales of $0.1
million for the quarter and $4.3 million for the year to date.
Chemical segment sales advanced 14.8 percent to $110 million during the third
quarter and 7.7 percent to $293 million for the year to date as a result of
incremental volumes from U.S. and Canadian acquisitions. Operating income was
flat at $9.4 million. Operating margins declined due in part to investments to
increase the size and capability of the segment's fully commissioned sales
force. For the first nine months, operating income grew 6.6 percent to $27.0
million. The European operations continued to report a small loss for the nine
months, which was slightly greater than the loss last year. The Enforcer
acquisition closed on March 12, 1997, and is reported as part of the chemical
segment.
The envelope segment increased sales during the quarter by 4.9 percent to $34
million and for the nine months by 6.9 percent to $99 million. Operating profit
improved by 14.6 percent to $3.0 million for the quarter largely due to the
increased sales volume and lower manufacturing costs. Operating profit improved
14.3 percent to $7.7 million for the first nine months.
The decrease in sales and operating profits disclosed in the "other" category
reflects the divestiture of the insulation business, which was sold on February
28, 1997, for $27.1 million in cash.
Corporate expenses were up $0.4 million for the third quarter and $5.2 million
year to date due to accrued long-term incentive plan costs and consulting
expenses for refining strategic planning and introducing economic profit. These
expenditures are intended to accelerate the company's profitable growth. Net
interest increased slightly due to the share repurchase initiatives.
The provision for income taxes was 37.1 percent of pretax income for the quarter
compared to 37.6 last year and 36.9 percent year to date compared with 37.4
percent for last year. Changes in the comparative year-to-year effective rates
resulted from improvement in effective state tax rates and variations in the
relative amounts of tax exempt income.
From time to time, the company may publish forward-looking statements relating
to such matters as anticipated financial performance, business prospects,
technological developments, new products, research and development activities
and similar matters. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. In order to comply with
the terms of the safe harbor, the company notes that a variety of factors could
cause the company's actual results and experience to differ materially from the
anticipated results or other expectations expressed in the company's
forward-looking statements. The risks and uncertainties that may affect the
operations, performance, development and results of the company's business
include without limitation the following: (a) the uncertainty of general
business and economic conditions, particularly the potential for a slowdown in
nonresidential construction awards; (b) divestitures and other restructuring
activities; (c) the ability to achieve strategic initiatives, including but not
limited to the ability to achieve sales growth across the business segments
through a combination of increased pricing, sales force, and new products and
improved customer service.
Page 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits are listed on the Index to Exhibits (page 12).
(b) There were no reports on Form 8-K for the three months ended May 31, 1997.
Page 11
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.
NATIONAL SERVICE INDUSTRIES, INC.
REGISTRANT
DATE July 15, 1997
DAVID LEVY
EXECUTIVE VICE PRESIDENT, ADMINISTRATION
AND COUNSEL
DATE July 15, 1997
BROCK HATTOX
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Page 12
INDEX TO EXHIBITS
Page No.
EXHIBIT 10 (iii)A Stock Option Agreement for Nonemployee Directors
Dated March 19, 1997 between National Service
Industries, Inc. and
(a) John L. Clendenin
(b) Senator Sam Nunn 13
EXHIBIT 11 Computations of Net Income per Share of 19
Common Stock
EXHIBIT 27 Financial Data Schedules 20