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Manpower Reports 2nd Quarter and First Half 2001 Results; Earnings Per Share Decline 8% for 2nd Quarter on a 3% Revenue Decline

PRNewswire
MILWAUKEE
Jul 19, 2001

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended June 30, 2001 declined 9 percent to $34.6 million, or 45 cents per diluted share, from $38.0 million, or 49 cents per diluted share, a year earlier. Revenues for the second quarter totaled $2.6 billion, a decline of 3 percent from the year-earlier period. The gross profit margin improved to 18.7 percent in the quarter from 17.6 percent the prior year as gross margin improvements were realized in several of the company's markets including France, the U.S. and the U.K. Results for the second quarter were once again affected by relatively weaker foreign currencies compared to the prior year period. On a constant currency basis, earnings per share for the quarter were ahead of prior year at 50 cents on a 3 percent revenue gain.

"Our customers across the U.S. are reducing their overall workforce to more accurately reflect the slowing demand for their products and services. In turn, this has reduced our sales significantly. Not surprisingly, we are now witnessing this "flexing" moving into Europe," Manpower President and CEO, Jeffrey A. Joerres stated. "Although the economic environment has deteriorated, we have not reduced our focus on our key strategic initiatives. I continue to be pleased with our improving gross profit margin. This reflects our continuing efforts to re-balance our business mix as well as the strength and value that the Manpower brand brings to our customers."

Commenting on the outlook for the second half of the year, Joerres added, "The global economic slowing will continue to challenge revenue and profit growth for the balance of the year. Given the current economic environment, forecasting with any degree of certainty becomes difficult, however, we now expect earnings for the full year to decline in the range of 13 percent in constant currency, which would be in the range of $1.80 per share. We estimate earnings for the third quarter to be between 48 cents and 52 cents per share."

Net income for the six months ended June 30, 2001 totaled $61.5 million or 80 cents per diluted share, down 3 percent from $63.6 million, or 82 cents per diluted share in 2000. Revenues for the six-month period matched the prior year at $5.3 billion. On a constant currency basis, earnings per share for the six-month period rose 9 percent on a revenue increase of 6 percent.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 19, 2001 at 9:00 a.m. CDT (10:00 a.m. EDT). Interested parties are invited to listen by logging on to http://investor.manpower.com/ .

Manpower Inc. is a world leader in the staffing industry, providing workforce management services and solutions to customers through 3,800 offices in 59 countries. The firm annually provides employment to more than 2.7 million people worldwide and is an industry leader in employee assessment and training. Manpower also offers organizational performance consulting services worldwide through its independent operating division, The Empower Group. More information on Manpower Inc. can be found at the company's website, http://www.manpower.com/ . More information can also be found about The Empower Group at its website, http://www.empowergrp.com/ .

This news release contains statements, including earning projections, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company's expected future results. The Company's actual results may differ materially from those described or contemplated in the forward-looking statements. Factors that may cause the Company's actual results to differ materially from those contained in the forward-looking statement can be found in the Company's reports filed with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2000, which information is incorporated herein by reference.

                                Manpower Inc.
                            Results of Operations
                     (In millions, except per share data)

                                               Three Months Ended June 30
                                             2001         2000      Variance
  Systemwide sales                         $2,944.1     $3,121.9      -5.7%

  Revenue from services                     2,620.1      2,714.1      -3.5%
  Cost of services                          2,131.0      2,236.3      -4.7%

    Gross profit                              489.1        477.8       2.4%

  Selling and administrative expenses         426.4        408.1       4.5%

    Operating profit                           62.7         69.7     -10.1%

  Interest and other expenses                   8.6         10.7     -20.3%

    Earnings before income taxes               54.1         59.0      -8.3%

  Provision for income taxes                   19.5         21.0      -7.1%

    Net earnings                              $34.6        $38.0      -8.9%


  Net earnings per share - basic              $0.46        $0.50      -8.0%

  Net earnings per share - diluted            $0.45        $0.49      -8.2%


  Weighted average shares - basic              75.8         76.0      -0.2%

  Weighted average shares - diluted            76.9         77.1      -0.4%


                                Manpower Inc.
                            Results of Operations
                     (In millions, except per share data)

                                                Six Months Ended June 30
                                             2001         2000      Variance
  Systemwide sales                         $5,955.2     $6,097.4      -2.3%

  Revenue from services                     5,272.0      5,282.4      -0.2%
  Cost of services                          4,299.0      4,358.6      -1.4%

    Gross profit                              973.0        923.8       5.3%

  Selling and administrative expenses         858.2        803.6       6.8%

    Operating profit                          114.8        120.2      -4.5%

  Interest and other expenses                  18.8         21.5     -12.5%

    Earnings before income taxes               96.0         98.7      -2.7%

  Provision for income taxes                   34.5         35.1      -1.4%

    Net earnings                              $61.5        $63.6      -3.4%

  Net earnings per share - basic              $0.81        $0.84      -3.6%

  Net earnings per share - diluted            $0.80        $0.82      -2.4%


  Weighted average shares - basic              75.8         76.0      -0.3%

  Weighted average shares - diluted            76.9         77.2      -0.4%


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                     Three Months Ended   Six Months Ended
                                          June 30             June 30
                                       2001      2000      2001      2000
  Revenues from services:
    United States (a)                  $523.5    $609.6  $1,069.8  $1,173.5
    France                              948.6   1,021.0   1,887.8   1,934.6
    United Kingdom                      369.6     347.2     750.5     712.2
    Other Europe                        475.3     459.8     974.6     919.3
    Other Countries                     303.1     276.5     589.3     542.8
                                     $2,620.1  $2,714.1  $5,272.0  $5,282.4

  Operating Unit Profit:
    United States                       $12.2     $23.0     $20.4     $38.5
    France                               35.4      31.5      61.7      52.3
    United Kingdom                       10.2       9.6      19.9      17.6
    Other Europe                         17.7      17.8      37.0      32.5
    Other Countries                       1.1       1.5       3.0       5.1
                                         76.6      83.4     142.0     146.0
    Corporate expenses                   10.0      10.4      19.6      18.9
    Amortization of intangibles           3.9       3.3       7.6       6.9
      Operating profit                   62.7      69.7     114.8     120.2
    Interest and other expense (b)        8.6      10.7      18.8      21.5
      Earnings before taxes             $54.1     $59.0     $96.0     $98.7

  Footnotes:
  (a) Total systemwide sales in the United States, which includes sales of
      Company-owned branches and franchises were $801.5 and $965.3 for the
      three months ended June 30, 2001 and 2000, respectively, and $1,663.0
      and $1,887.3 for the six months ended June 30, 2001 and 2000,
      respectively.

  (b) The components of interest and
      other expense (income) were:

            Interest expense             $8.7      $7.9     $17.4     $15.8
            Interest income              (2.4)     (1.7)     (5.0)     (3.7)
            Translation loss (gain)      (0.9)      0.2      (0.2)      1.3
            Loss on sale of accounts
             receivable                   1.7       2.1       4.0       5.2
            Miscellaneous                 1.5       2.2       2.6       2.9
                                         $8.6     $10.7     $18.8     $21.5


                                Manpower Inc.
                          Condensed Balance Sheets
                                (In millions)

                                                 June 30           Dec. 31
                                                   2001              2000
                                               (Unaudited)
  Current assets:
    Cash and cash equivalents                     $169.7            $181.7
    Accounts receivable                          1,969.2           2,094.4
    Prepaid expenses and other assets              134.3             120.6

      Total current assets                       2,273.2           2,396.7

  Other assets                                     513.3             453.3

  Property and equipment                           184.4             191.6

      Total assets                              $2,970.9          $3,041.6


  Current liabilities:
    Accounts payable                              $477.3            $453.1
    Employee compensation payable                   78.4              81.2
    Accrued liabilities                            214.5             269.2
    Accrued payroll taxes and insurance            305.1             341.8
    Value added tax payable                        276.7             311.0
    Short-term borrowings and current
      maturities of long-term debt                  38.4              65.9

      Total current liabilities                  1,390.4           1,522.2

  Other liabilities:
    Long-term debt                                 545.2             491.6
    Other long-term liabilities                    291.2             287.4

      Total other liabilities                      836.4             779.0

  Shareholders' equity                             744.1             740.4

    Total liabilities and shareholders'
     equity                                     $2,970.9          $3,041.6

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SOURCE: Manpower Inc.

Contact: Mike Van Handel, Chief Financial Officer of Manpower,
+1-414-906-6305

Website: http://www.manpower.com/
http://investor.manpower.com/
http://www.empowergrp.com/


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