Exhibit 99.1
COMPANY CONTACT:
NOVEMBER 8, 2001 CHESTER J. POPKOWSKI (CHET)
VICE PRESIDENT, TREASURER
(404) 853-1405
WEB SITE: WWW.NATIONALSERVICE.COM
NSI
----
BOARD OF DIRECTORS APPROVES SPIN-OFF
OF LIGHTING EQUIPMENT AND CHEMICALS BUSINESSES
----
NAMES VERNON NAGEL AS CFO OF SPIN-OFF COMPANY
----
ATLANTA, GA -- THE BOARD OF DIRECTORS OF NATIONAL SERVICE INDUSTRIES,
INC. (NYSE: NSI) YESTERDAY FORMALLY APPROVED THE SPIN-OFF OF THE COMPANY'S
LIGHTING EQUIPMENT AND CHEMICALS BUSINESSES INTO A SEPARATELY TRADED COMPANY.
THE SPIN-OFF COMPANY IS CURRENTLY CALLED L & C SPINCO, INC. BUT WILL BE
OFFICIALLY RENAMED SOON. THE POST-SPIN NSI WILL CONSIST OF NSI'S REMAINING
TEXTILE RENTAL AND ENVELOPE BUSINESSES.
SUBJECT TO SATISFACTION OF CERTAIN CONDITIONS DESCRIBED BELOW, THE
SPIN-OFF WILL BE ACCOMPLISHED THROUGH A SPECIAL DIVIDEND OF L & C SPINCO COMMON
STOCK TO BE DISTRIBUTED ON NOVEMBER 30, 2001 TO NSI STOCKHOLDERS OF RECORD AS OF
NOVEMBER 16, 2001. NSI STOCKHOLDERS WILL RECEIVE ONE SHARE OF L & C SPINCO
COMMON STOCK FOR EVERY SHARE OF NSI COMMON STOCK HELD. THE DISTRIBUTION OF L & C
SPINCO COMMON STOCK SHOULD BE TAX-FREE TO NSI AND ITS STOCKHOLDERS. AN
INFORMATION STATEMENT DESCRIBING L & C SPINCO AND THE DISTRIBUTION WILL BE
MAILED TO NSI'S STOCKHOLDERS BEGINNING ON NOVEMBER 16, 2001. PAYMENT OF THE
DIVIDEND IS SUBJECT TO FINAL CLEARANCE FROM THE SECURITIES AND EXCHANGE
COMMISSION AND THE NEW YORK STOCK EXCHANGE AND RECEIPT OF CUSTOMARY SOLVENCY AND
TAX OPINIONS.
FOLLOWING THE DISTRIBUTION, NSI WILL CONTINUE TO TRADE ON THE NEW YORK
STOCK EXCHANGE UNDER THE SYMBOL "NSI." L & C SPINCO WILL ALSO BE LISTED ON THE
NEW YORK STOCK EXCHANGE. THERE IS NOT CURRENTLY A TRADING MARKET FOR L & C
SPINCO COMMON STOCK. A "WHEN ISSUED" TRADING MARKET IS EXPECTED TO DEVELOP FOR
THE L & C SPINCO COMMON STOCK ON THE NEW YORK STOCK EXCHANGE BEGINNING ON OR
ABOUT NOVEMBER 14, 2001, REFLECTING A POST-SPIN-OFF VALUE FOR L & C SPINCO
COMMON STOCK. THE "WHEN ISSUED" TRADING MARKET WILL LAST THROUGH THE DATE OF THE
DISTRIBUTION. BOTH
4
COMPANIES ARE EXPECTED TO BEGIN TRADING AS SEPARATE ISSUES ON DECEMBER 3, 2001.
PRIOR TO EXECUTING A STOCK TRADE DURING THE "WHEN ISSUED" TRADING PERIOD,
STOCKHOLDERS SHOULD CHECK WITH THEIR STOCKBROKERS, BANKS, OR OTHER NOMINEES FOR
DETAILS REGARDING THE "WHEN ISSUED" TRADING MARKET FOR THE L & C SPINCO COMMON
STOCK AND THE IMPACT OF THE DISTRIBUTION ON THE TRADING OF NSI'S COMMON STOCK.
JAMES S. BALLOUN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF NSI, SAID,
"WE ARE CONFIDENT THAT THIS TRANSACTION WILL PROVIDE THE TWO SEPARATED COMPANIES
BOTH THE CAPITAL STRUCTURE AND THE MANAGEMENT FOCUS REQUIRED FOR LONG-TERM
GROWTH AND SUCCESS, WHICH WILL OFFER COMPELLING VALUE TO THE MARKET AND ENHANCED
OPPORTUNITIES FOR EMPLOYEES OF BOTH COMPANIES."
AS PREVIOUSLY ANNOUNCED, BALLOUN WILL SERVE AS CHAIRMAN AND CHIEF
EXECUTIVE OFFICER OF L & C SPINCO UPON COMPLETION OF THE SPIN-OFF. BROCK A.
HATTOX WILL SERVE AS CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE POST-SPIN NSI.
THE COMPANY ALSO ANNOUNCED YESTERDAY THAT VERNON J. NAGEL HAS BEEN
NAMED CHIEF FINANCIAL OFFICER OF L & C SPINCO AND WILL ASSUME THE POSITION
FOLLOWING COMPLETION OF THE SPIN-OFF. FOR THE PAST TWO YEARS, NAGEL SERVED WITH
JEPSON ASSOCIATES, INC., A PRIVATE INVESTMENT COMPANY, WHERE HE WAS RESPONSIBLE
FOR MERGER AND ACQUISITION ACTIVITY RELATED TO SPECIALIZED MANUFACTURING
COMPANIES. FROM 1993 TO 1999, NAGEL WAS EXECUTIVE VICE PRESIDENT, CHIEF
FINANCIAL OFFICER, AND TREASURER OF KUHLMAN CORPORATION, WHICH WAS A NYSE-LISTED
DIVERSIFIED INDUSTRIAL MANUFACTURING COMPANY THAT PRODUCED PROPRIETARY PRODUCTS
FOR COMMERCIAL AND INDUSTRIAL APPLICATIONS. PRIOR TO THAT, NAGEL WAS VICE
PRESIDENT OF FINANCE, CHIEF FINANCIAL OFFICER, TREASURER, AND SECRETARY OF
STERICYCLE, INC., A LEADING PROVIDER OF MEDICAL WASTE MANAGEMENT AND RELATED
SERVICES TO THE HEALTHCARE INDUSTRY.
"VERN NAGEL BRINGS MORE THAN 20 YEARS OF SUCCESSFUL FINANCIAL
MANAGEMENT EXPERIENCE TO THE TABLE, HAVING SERVED IN SENIOR FINANCIAL POSITIONS
AT VARIOUS COMPANIES," SAID BALLOUN. "FOLLOWING THE SPIN-OFF, L & C SPINCO WILL
LEVERAGE VERN'S EXPERTISE AS WE MOVE FORWARD WITH OUR PLANS TO IMPROVE OPERATING
PERFORMANCE IN ORDER TO POSITION OURSELVES FOR FUTURE GROWTH."
NAGEL SAID, "I AM EXCITED ABOUT THE FUTURE POTENTIAL OF THE LIGHTING
AND CHEMICALS BUSINESSES. I LOOK FORWARD TO WORKING WITH THE OTHER
5
MEMBERS OF MANAGEMENT TO HELP THE COMPANY ACHIEVE ITS BUSINESS GOALS AND TO
BUILD GREATER SHAREHOLDER VALUE."
* * *
CERTAIN INFORMATION CONTAINED IN THIS PRESS RELEASE CONSTITUTES
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS ARE INHERENTLY
UNCERTAIN AND INVOLVE RISKS. CONSEQUENTLY, ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE INDICATED BY THE FORWARD-LOOKING STATEMENTS. STATEMENTS MADE HEREIN
THAT MAY BE CONSIDERED FORWARD LOOKING INCLUDE STATEMENTS CONCERNING: (A) THE
TAX-FREE NATURE OF THE DISTRIBUTION OF L & C SPINCO COMMON STOCK TO NSI AND ITS
STOCKHOLDERS; (B) ANTICIPATED LISTINGS ON THE NEW YORK STOCK EXCHANGE FOR EACH
OF THE TWO INDEPENDENT COMPANIES; (C) THE EXPECTED DATE THE SHARES OF EACH
COMPANY WILL TRADE AS SEPARATE ISSUES; (D) THE IMPACT OF THIS TRANSACTION ON
EACH COMPANY'S CAPITAL STRUCTURE AND MANAGEMENT FOCUS; (E) THE PERCEIVED VALUE
TO THE MARKET OF THE TWO SEPARATE COMPANIES; (F) ENHANCED OPPORTUNITIES FOR
EMPLOYEES OF BOTH COMPANIES; (G) THE TIMING AND DEVELOPMENT OF A "WHEN ISSUED"
TRADING MARKET FOR L & C SPINCO COMMON STOCK; AND (H) THE TIMING OF THE MAILING
OF THE INFORMATION STATEMENT TO NSI STOCKHOLDERS. A VARIETY OF RISKS AND
UNCERTAINTIES COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THE ANTICIPATED RESULTS OR OTHER EXPECTATIONS EXPRESSED IN THE COMPANY'S
FORWARD-LOOKING STATEMENTS. THE RISKS AND UNCERTAINTIES INCLUDE WITHOUT
LIMITATION THE FOLLOWING: (A) UNDERLYING ASSUMPTIONS OR EXPECTATIONS RELATED TO
THE SPIN-OFF TRANSACTION PROVING TO BE INACCURATE OR UNREALIZED; (B) THE TIMING
OF THE SECURITIES AND EXCHANGE COMMISSION'S REVIEW OF THE COMPANY'S REGISTRATION
STATEMENT ON FORM 10; (C) THE UNCERTAINTY OF GENERAL BUSINESS AND ECONOMIC
CONDITIONS, INCLUDING THE POTENTIAL FOR A MORE SEVERE SLOWDOWN IN
NON-RESIDENTIAL CONSTRUCTION AWARDS, INTEREST RATE CHANGES, AND FLUCTUATIONS IN
COMMODITY AND RAW MATERIAL PRICES; (D) UNEXPECTED DEVELOPMENTS AND OUTCOMES IN
THE COMPANY'S LEGAL AND ENVIRONMENTAL PROCEEDINGS; AND (E) THE COMPANY'S ABILITY
TO REALIZE THE ANTICIPATED BENEFITS OF STRATEGIC INITIATIVES RELATED TO
INCREASED PRODUCTIVITY, NEW PRODUCT DEVELOPMENT, TECHNOLOGICAL ADVANCES, COST
SYNERGIES, SOURCING, DECREASES IN NET WORKING CAPITAL, AND THE ACHIEVEMENT OF
SALES GROWTH. ADDITIONAL FACTORS RELATED TO THESE AND OTHER EXPECTATIONS ARE AND
WILL BE DETAILED IN FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION,
INCLUDING THE REGISTRATION STATEMENT ON FORM 10, AS AMENDED, FILED BY L & C
SPINCO,
6
NSI'S FORM 10-Q FOR THE THIRD QUARTER OF FISCAL YEAR 2001, AND NSI'S FORM 10-K
TO BE FILED FOR FISCAL YEAR 2001.
* * *
NATIONAL SERVICE INDUSTRIES, INC., WITH FISCAL YEAR 2001 SALES OF $2.6
BILLION, HAS FOUR BUSINESS SEGMENTS -- LIGHTING EQUIPMENT, CHEMICALS, TEXTILE
RENTAL, AND ENVELOPES.
7