-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GR9wv2swivjF8DRCN9gRxbsdoj1wj86qTM9bBr2bYlLIcOMOlg05J8f6Me1uHbCy sZqzEfh34kThkexoD4QiaA== 0000070538-97-000008.txt : 19970415 0000070538-97-000008.hdr.sgml : 19970415 ACCESSION NUMBER: 0000070538-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970414 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL SERVICE INDUSTRIES INC CENTRAL INDEX KEY: 0000070538 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 580364900 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03208 FILM NUMBER: 97579645 BUSINESS ADDRESS: STREET 1: 1420 PEACHTREE ST NE CITY: ATLANTA STATE: GA ZIP: 30309 BUSINESS PHONE: 4048531000 MAIL ADDRESS: STREET 1: 1420 PEACHTREE ST NE CITY: ATLANTA STATE: GA ZIP: 30309 10-Q 1 NATIONAL SERVICE INDUSTRIES, INC. 10-Q Page 1 of 14 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 February 28, 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 - 45,128,138 shares as of March 31, 1997. Page 2 NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES INDEX Page No. PART I. FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS - FEBRUARY 28, 1997 AND AUGUST 31, 1996 3 CONSOLIDATED STATEMENTS OF INCOME - THREE MONTHS AND SIX MONTHS ENDED FEBRUARY 28, 1997 AND FEBRUARY 29, 1996 4 CONSOLIDATED STATEMENTS OF CASH FLOWS - SIX MONTHS ENDED FEBRUARY 28, 1997 AND FEBRUARY 29, 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) February 28, August 31, 1997 1996 ASSETS (Unaudited) Current Assets: Cash and cash equivalents ........................... $ 30,648 $ 58,662 Short-term investments .............................. 551 551 Receivables, less reserves for doubtful accounts of $6,587 at February 28, 1997 and $5,807 at August 31, 1996 .................... 239,789 269,971 Inventories, at the lower of cost (on a first-in, first-out basis) or market ............. 164,903 169,813 Linens in service, net of amortization ............. 96,390 97,710 Deferred income taxes ............................... 10,030 2,152 Prepayments ......................................... 11,318 7,522 Total Current Assets .............................. 553,629 606,381 Property, Plant, and Equipment, at cost: Land ................................................ 27,591 29,062 Buildings and leasehold improvements ................ 184,425 194,219 Machinery and equipment ............................. 523,391 542,056 Total Property, Plant, and Equipment ............. 735,407 765,337 Less - Accumulated depreciation and amortization ...................................... 391,020 407,941 Property, Plant, and Equipment - net ........... 344,387 357,396 Other Assets: Goodwill and other intangibles ...................... 85,538 89,427 Other ............................................... 35,733 41,442 Total Other Assets ................................ 121,271 130,869 Total Assets .................................... $1,019,287 $1,094,646 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt ................ $ 5,566 $ 46 Notes payable ....................................... 5,657 6,696 Accounts payable .................................... 85,522 79,851 Accrued salaries, commissions, and bonuses ......... 29,944 42,788 Current portion of self insurance reserves .......... 18,118 15,396 Other accrued liabilities ........................... 40,054 52,649 Total Current Liabilities ......................... 184,861 197,426 Long-Term Debt, less current maturities .............. 26,262 24,920 Deferred Income Taxes ................................. 56,630 63,347 Self Insurance Reserves, less current portion ........ 60,228 63,369 Other Long-Term Liabilities ........................... 28,437 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 February 28, 1997 and August 31, 1996 ..................... 57,919 57,919 Paid-in capital ..................................... 11,976 11,021 Retained earnings ................................... 807,318 791,367 877,213 860,307 Less - Treasury stock, at cost (13,364,809 shares at February 28, 1997 and 11,447,036 shares at August 31, 1996) ....................... 214,344 142,299 Total Stockholders' Equity .................... 662,869 718,008 Total Liabilities and Stockholders' Equity .. $1,019,287 $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 SIX MONTHS ENDED FEB. 28, FEB. 29, FEB. 28, FEB. 29, 1997 1996 1997 1996 Sales and Service Revenues: Net sales of products ................ $ 371,384 $ 352,403 $ 753,147 $ 712,245 Service revenues ....................... 127,852 129,803 257,982 262,511 Total Revenues ....................... 499,236 482,206 1,011,129 974,756 Costs and Expenses: Cost of products sold .................. 235,313 227,098 471,917 454,537 Cost of services ....................... 75,197 74,850 150,775 149,214 Selling and administrative expenses .... 155,148 150,514 313,530 302,734 Interest expense, net ................. 950 340 1,600 598 Other expense, net .................... 441 (1,316) 1,780 (142) Total Costs and Expenses ............. 467,049 451,486 939,602 906,941 Income before Provision for Income Taxes . 32,187 30,720 71,527 67,815 Provision for (Benefit from) Income Taxes: Current ................................ 10,459 12,991 24,965 27,218 Deferred ............................... 1,383 (1,521) 1,383 (1,922) 11,842 11,470 26,348 25,296 Net Income ............................... $ 20,345 $ 19,250 $ 45,179 $ 42,519 Per Share: Net income ............................. $ .45 $ .40 $ .99 $ .88 Cash dividends ......................... $ .30 $ .29 $ .59 $ .57 Weighted Average Number of Shares Outstanding (thousands) ................ 44,994 48,364 45,468 48,350
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) SIX MONTHS ENDED FEB. 28 FEB. 29 1997 1996 Cash Provided by (Used for) Operating Activities: Net income ........................................... $ 45,179 $ 42,519 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................... 29,507 29,336 Provision for losses on accounts receivable ...... 2,283 2,256 Gain on the sale of property, plant, and equipment (243) (1,459) Gain on the sale of business ..................... (924) (2,946) Change in noncurrent deferred income taxes ....... 1,383 (1,922) Change in assets and liabilities net of effect of acquisitions- Receivables .................................. 12,220 11,030 Inventories and linens in service, net ....... 321 (913) Current deferred income taxes ................ (7,879) (5,286) Prepayments and other ........................ (5,370) (3,669) Accounts payable and accrued liabilities ..... (17,426) (26,686) Changes in self-insurance reserves and other long-term liabilities .................. (2,280) (3,198) Net Cash Provided by Operating Activities .. 56,771 39,062 Cash Provided by (Used for) Investing Activities: Change in short-term investments ..................... -- 1,048 Purchase of property, plant, and equipment ........... (20,190) (31,100) Sale of property, plant, and equipment ............... 2,833 3,695 Sale of business ..................................... 31,259 11,517 Acquisitions, net of cash acquired ................... (3,609) (600) Change in other assets ............................... 729 957 Net Cash Used for Investing Activities ............. 11,022 (14,483) Cash Provided by (Used for) Financing Activities: Change in notes payable .............................. (1,039) 231 Issuance (repayment) of long-term debt ............... 6,862 (50) Recovery of investment in tax benefits ............... 661 860 Deferred income taxes from investment in tax benefits ...................................... (1,972) (2,136) Purchase of treasury stock ........................... (71,090) (1,919) Cash dividends paid .................................. (27,079) (27,570) Net Cash Used for Financing Activities ............. (93,657) (30,584) Effect of Exchange Rate Changes on Cash ................ (2,150) 34 Net Change in Cash and Cash Equivalents ................ (28,014) (5,971) Cash and Cash Equivalents at Beginning of Year ......... 58,662 79,402 Cash and Cash Equivalents at End of Period ............. $ 30,648 $ 73,431 Supplemental Cash Flow Information: Income taxes paid during the period .................. $ 38,296 $ 41,850 Interest paid during the period ...................... 2,862 2,096 Noncash Investing and Financing Activities: Noncash aspects of sale of business - Receivables incurred .............................. $ (347) $ -- Liabilities assumed (removed) ...................... (507) Noncash Aspects of Acquisitions: Liabilities assumed or incurred ...................... $ (886) $ 6 Treasury stock issued (returned) ..................... -- -- 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 condensed 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 February 28, 1997, the consolidated results of operations for the three months and six months ended February 28, 1997 and February 29, 1996, and the consolidated cash flows for the six months ended February 28, 1997 and February 29, 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 six months ended February 28, 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 Feb. 28, 1997 and Feb. 29, 1996 Sales and Service Revenues Operating Profit 1997 1996 1997 1996 (In thousands) Lighting Equipment ... $ 223,721 $ 206,454 $ 20,645 $ 13,776 Textile Rental ....... 127,852 129,803 7,301 9,247 Chemical ............. 87,695 84,355 6,624 6,222 Envelopes ............ 33,410 30,482 2,638 2,046 Other ................ 26,558 31,112 (632) 1,006 $ 499,236 $ 482,206 36,576 32,297 Corporate ............ (3,439) (1,237) Interest expense, net (950) (340) Total ................ $ 32,187 $ 30,720 Six Months Ended Feb. 28, 1997 and Feb. 29, 1996 Sales and Service Revenues Operating Profit 1997 1996 1997 1996 (In thousands) Lighting Equipment ... $ 451,168 $ 414,732 $ 42,017 $ 30,154 Textile Rental ....... 257,982 262,511 15,438 19,000 Chemical ............. 183,177 176,462 17,547 15,927 Envelopes ............ 64,761 59,965 4,751 4,162 Other ................ 54,041 61,086 947 1,980 $ 1,011,129 $ 974,756 80,700 71,223 Corporate ............ (7,573) (2,810) Interest expense, net (1,600) (598) Total ................ $ 71,527 $ 67,815
Page 7 NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (CONTINUED) 3. INVENTORIES Major classes of inventory as of February 28, 1997 and August 31, 1996 were as follows: February 28, August 31, 1997 1996 (In thousands) Raw Materials and Supplies ............. $ 62,108 $ 73,236 Work-in-Process ........................ 10,120 9,679 Finished Goods ......................... 92,675 86,898 Total ............................. $164,903 $169,813 4. ACCOUNTING STANDARDS ADOPTED 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. During the three months and six months ended February 28, 1997, there were no circumstances indicating impairment of assets. 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 maintained a strong financial position at February 28, 1997. Net working capital was $368.8 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 $31.2 million compared with $59.2 million at August 31. For the six months ended February 28, the company invested $23.8 million in capital expenditures and acquisitions. The percent of debt to total capitalization was 5.4 percent, up from 4.2 percent at August 31. Cash provided by operating activities was $56.8 million, up from $39.1 million for the first half last year. Capital expenditures, exclusive of acquisition spending, were $20.2 million for the first half this year and $31.1 million for the same period a year ago. In both periods, 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 textile rental spending also included fleet replacements. Current year acquisition spending of $3.6 million was the result of the chemical segment's purchase of chemical products companies in Ohio and Canada and the lighting equipment segment's acquisition of Lumaid, Inc., a small emergency lighting products manufacturer in Canada. During the quarter, the company agreed to purchase for stock Enforcer Products, Inc., a specialty chemical company with a retail focus. The acquisition was completed during the third quarter. Acquisition spending was minimal in the prior-year period. Cash from divestitures totaled $31.3 million for the first half. During the 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, generating cash of $4.1 million and $11.5 million, respectively. Dividend payments totaled $27.1 million, or 59 cents per share, compared with $27.6 million, or 57 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 quarter, 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 the third quarter, the company plans to repurchase stock to offset the dilution caused by the $20 million in shares initially issued to purchase Enforcer. 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. 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 $20 million. For the current fiscal year, the company expects actual capital expenditures to be comparable to 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 has been provided 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 second quarter ended February 28, 1997 increased 12.5 percent to 45 cents compared with the same quarter a year ago. Sales for the quarter increased 3.5 percent to $499 million. Net income of $20.3 million was 5.7 percent higher than the $19.3 million reported in last year's second quarter. Second quarter 1997 pretax earnings included gains of $0.5 million on asset sales and $1.8 million from improved 1995 workers' compensation claims experience. The second quarter of 1996 included gains of $3.5 million on asset sales. Earnings per share increased at a greater rate of 12.5 percent due to 3.4 million fewer average shares outstanding compared to the second quarter a year ago. For the first half of NSI's fiscal year, sales increased $36 million, or 3.7 percent, to $1.0 billion. Net income increased $2.7 million, or 6.3 percent, to $45.2 million. The 1997 first half pre-tax earnings included gains of $1.2 million from asset sales and $3.6 million from ongoing favorable workers' compensation claims experience. Gains on asset sales were $4.4 million in the first half of 1996. Earnings per share for the first six months increased 12.5 percent to 99 cents. Page 9 The second quarter performance was led by the lighting equipment segment as a result of continued strength in non-residential construction, growth in retail sales and the introduction of new products. Sales advanced 8.4 percent to $224 million for the quarter and 8.8 percent to $451 million for the first half. Operating income advanced 49.9 percent to $20.6 million for the quarter and 39.3 percent to $42.0 million for the six 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 second quarter and six months, sales in the textile rental segment were down 1.5 percent to $128 million and 1.7 percent to $258 million, respectively, as a result of previously divested branches. Operating income declined 21.0 percent to $7.3 million from $9.2 million in the second quarter of 1996 and 18.7 percent to $15.4 million from $19.0 million for the first half of 1996. Operating income for the quarter included gains of $0.4 million on asset sales, a $1.1 million reduction in workers' compensation self insurance reserves, and $2.8 million for accounting policy changes for ancillary linen revenue. Partially offsetting the gains was a $2.2 million charge for ongoing facility consolidations. For the first half, operating income included gains of $0.9 million on asset sales, a $2.2 million reduction in workers' compensation self insurance reserves, and the $2.8 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 third and fourth quarters. The 1996 operating income included gains on asset sales of $3.4 million for the quarter and $4.1 million for the year to date. As previously reported, the textile rental segment has concentrated on improving revenue quality through better contract administration, focused sales efforts, and improved service. In addition, operating costs have been reduced by approximately $8.0 million per year. As a result of these efforts, the segment has begun to show improved core operating profit rates. Management is currently evaluating strategic alternatives to establish a stable operating platform and anticipates completing this process by year end. Chemical segment sales advanced 4.0 percent to $88 million during the second quarter and 3.8 percent to $183 million for the year to date as a result of improved productivity of the sales force and incremental volumes from U.S. and Canadian acquisitions. Operating income grew 6.5 percent to 7.6 percent of revenues from 7.4 percent the prior-year second quarter and 10.2 percent to 9.6 percent of revenues from 9.0 percent the prior first half. The gains resulted from improved domestic volume. The Enforcer acquisition closed on March 12, 1997, and will be reported as part of the chemical segment in future periods. The European operations continued to report a small loss for the first half, which was equal to the loss last year. The envelope segment increased sales during the quarter by 9.6 percent to $33 million and for the six months by 8.0 percent to $65 million. Operating profit improved by 28.9 percent to $2.6 million for the quarter and 14.2 percent to $4.8 million for the first half due to stable paper costs and improved plant efficiencies. The insulation business was sold on February 28, 1997, for $27.1 million in cash. Due to the transition in ownership, sales slipped by 14.6 percent to $27 million resulting in a loss for the quarter of $0.6 million. Year to date, the operating profit was $0.9 million. Corporate expenses were up $2.2 million for the second quarter and $4.8 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 36.8 percent of pretax income for the quarter and year to date, compared with 37.3 percent for both prior-year periods. Changes in the comparative year-to-year effective rates resulted from 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) 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 February 28, 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 April 14, 1997 /s/ David Levy DAVID LEVY EXECUTIVE VICE PRESIDENT, ADMINISTRATION AND COUNSEL DATE April 14, 1997 /s/ Brock Hattox BROCK HATTOX EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Page 12 INDEX TO EXHIBITS EXHIBIT 11 Computation of Net Income per Share of 13 Common Stock EXHIBIT 27 Financial Data Schedules 14 EX-11 2 COMPUTATION OF NET INCOME PER SHARE Page 13 Exhibit 11 NATIONAL SERVICE INDUSTRIES, INC. AND SUBSIDIARIES COMPUTATIONS OF NET INCOME PER SHARE OF COMMON STOCK (In thousands, except per-share data) THREE MONTHS ENDED SIX MONTHS ENDED FEB. 28, FEB. 29, FEB. 28, FEB. 29, 1997 1996 1997 1996 Primary: Weighted Average Number of Shares (determined on a monthly basis) . 44,994 48,364 45,468 48,350 Net Income ........................ $ 20,345 $ 19,250 $ 45,179 $ 42,519 Primary Earnings per Share ........ $ .45 $ .40 $ .99 $ .88 Fully Diluted: Weighted Average Number of Shares Outstanding ..................... 44,994 48,364 45,468 48,350 Additional Shares Assuming Exercise of Options: Options exercised ............. 1,182 1,292 1,182 1,292 Treasury stock purchased with proceeds ............... (869) (1,007) (869) (983) Average Common Shares Outstanding (as adjusted) .................. 45,307 48,648 45,781 48,634 Net Income ........................ $ 20,345 $ 19,250 $ 45,179 $ 42,519 Fully Diluted Earnings per Share .. $ .45 $ .40 $ .99 $ .87
EX-27 3 FDS --
5 Page 96 Exhibit 27 Financial Data Schedules Quarter Ended February 28, 1997 Pursuant to Section 601(c) of Regulation S-K This schedule contains summary financial information extracted from National Service Industries, Inc. consolidated balance sheet as of February 28, 1997 and the consolidated statement of income for the six months ended February 28, 1997, and is qualified in its entirety by reference to such financial statements. 6-MOS AUG-31-1997 SEP-01-1996 FEB-28-1997 30,648 551 246,376 6,587 164,903 553,629 735,407 391,020 1,019,287 184,862 26,262 0 0 57,919 604,950 1,019,287 753,147 1,011,129 471,917 622,692 313,969 0 2,941 71,527 26,348 45,179 0 0 0 45,179 0.99 0.99
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