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Manpower Reports 3rd Quarter 2001 Results

PRNewswire
MILWAUKEE
Oct 18, 2001

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended September 30, 2001 declined 31 percent to $37.1 million, or 48 cents per diluted share, from $54.1 million, or 70 cents per diluted share, a year earlier. Revenues for the third quarter totaled $2.7 billion, a decline of 5 percent from the year-earlier period. The gross profit margin improved to 18.9 percent in the quarter from 18.0 percent the prior year as gross margin improvements were realized in several of the Company's markets. Results for the third 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 51 cents on a 2 percent revenue decline.

Commenting on the quarterly results Manpower President and CEO, Jeffrey A. Joerres, stated, "As anticipated, the global economies continued their decline throughout the third quarter resulting in a substantial decrease in demand for our services in several markets. While the slowdown has had a near term impact on our revenue growth, it has only heightened our focus on executing our core strategies. While aggressively controlling our costs during this economic downturn, we continue to make investments in new offices and other strategic initiatives, which will further strengthen the Company and the value that the Manpower brand brings to our customers.

"Looking to the fourth quarter, we expect that revenues will continue below prior year levels due to the economic environment. We anticipate fourth quarter net earnings to be in the range of 32 cents to 36 cents per share."

Net income for the nine months ended September 30, 2001 totaled $98.6 million or $1.28 per diluted share, down 16 percent from $117.7 million, or $1.52 per diluted share in 2000. Revenues for the nine-month period were $7.9 billion, a decline of 2% from the prior year. On a constant currency basis, earnings per share for the nine-month period were $1.40 on a revenue increase of 3 percent.

In conjunction with its third quarter earnings release, Manpower will broadcast its conference call live over the Internet on October 18, 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 provides a range of staffing solutions, engagement and consulting services worldwide under the subsidiary brands of Brook Street, Elan, The Empower Group and Jefferson Wells. More information on Manpower Inc. can be found at the company's Web site, http://www.manpower.com/ .

This news release contains statements, including revenue and 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 statements can be found in the Company's current report on Form 8-K dated August 14, 2001, which information is incorporated herein by reference, and such other factors as may be described from time to time in the Company's SEC filings.

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

                                                Three Months Ended
                                                   September 30
                                               2001         2000       Var.

  Systemwide sales                         $3,000.2     $3,226.1      -7.0%

  Revenue from services                     2,675.4      2,820.9      -5.2%
  Cost of services                          2,170.8      2,313.5      -6.2%

  Gross profit                                504.6        507.4      -0.5%

  SG&A expenses                               436.2        411.5       6.0%

  Operating profit                             68.4         95.9     -28.7%

  Interest and other expenses                  10.4         12.1     -14.1%

  Earnings before income taxes                 58.0         83.8     -30.8%

  Provision for income taxes                   20.9         29.7     -29.8%

  Net earnings                             $   37.1     $   54.1     -31.3%


  Net earnings per share:
    Basic                                  $   0.49     $   0.71     -31.0%

    Diluted                                $   0.48     $   0.70     -31.4%


  Weighted average shares:
    Basic                                      76.0         75.8       0.1%

    Diluted                                    76.9         77.1      -0.2%


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

                                                 Nine Months Ended
                                                   September 30
                                               2001         2000       Var.

  Systemwide sales                         $8,955.4     $9,323.6      -3.9%

  Revenue from services                     7,947.4      8,103.3      -1.9%
  Cost of services                          6,469.8      6,672.2      -3.0%

  Gross profit                              1,477.6      1,431.1       3.2%

  SG&A expenses                             1,294.4      1,215.0       6.5%

  Operating profit                            183.2        216.1     -15.2%

  Interest and other expenses                  29.2         33.6     -13.1%

  Earnings before income taxes                154.0        182.5     -15.6%

  Provision for income taxes                   55.4         64.8     -14.4%

  Net earnings                             $   98.6     $  117.7     -16.2%


  Net earnings per share:
    Basic                                  $   1.30     $   1.55     -16.1%

    Diluted                                $   1.28     $   1.52     -15.8%


  Weighted average shares:
    Basic                                      75.9         76.0      -0.1%

    Diluted                                    77.0         77.2      -0.3%



                              Manpower Inc.
                          Operating Unit Results
                        (In millions) - Unaudited

                                     Three Months Ended   Nine Months Ended
                                           September 30        September 30
                                         2001      2000      2001      2000
  Revenues from services:
    United States (a)                $  482.4    $638.1  $1,552.2  $1,811.6
    France                              991.5   1,036.4   2,879.3   2,971.0
    United Kingdom                      377.7     368.3   1,128.2   1,080.5
    Other Europe                        481.4     480.3   1,456.0   1,399.6
    Other Countries                     342.4     297.8     931.7     840.6
                                     $2,675.4  $2,820.9  $7,947.4  $8,103.3

  Operating Unit Profit:
    United States                    $    8.6     $25.0     $29.0     $63.5
    France                               37.2      39.3      98.9      91.6
    United Kingdom                       13.7      14.9      33.6      32.5
    Other Europe                         20.6      24.7      57.5      57.2
    Other Countries                       3.0       4.4       6.2       9.5
                                         83.1     108.3     225.2     254.3
    Corporate expenses                   10.2       9.3      29.9      28.2
    Amortization of intangibles           4.5       3.1      12.1      10.0
      Operating profit                   68.4      95.9     183.2     216.1
    Interest and other expense (b)       10.4      12.1      29.2      33.6
      Earnings before taxes          $   58.0     $83.8    $154.0    $182.5


  Footnotes:

  (a)  Total systemwide sales in the United States, which includes sales of
       Company-owned branches and franchises were $757.2 and $990.8 for the
       three months ended September 30, 2001 and 2000, respectively, and
       $2,420.2 and $2,878.1 for the nine months ended September 30, 2001
       and 2000, respectively.

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

        Interest expense                $10.8     $ 9.8     $28.3     $25.6
        Interest income                  (2.4)     (1.8)     (7.4)     (5.5)
        Translation loss (gain)          (0.3)      0.5      (0.5)      1.9
        Loss on sale of accounts
         receivable                       1.1       2.1       5.1       7.4
        Miscellaneous                     1.2       1.5       3.7       4.2
                                        $10.4     $12.1     $29.2     $33.6


                              Manpower Inc.
                       Consolidated Balance Sheets
                              (In millions)

                                                Sept. 30           Dec. 31
                                                    2001              2000
                                              (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                   $  232.9          $  181.7
    Accounts receivable, net                     2,122.4           2,094.4
    Prepaid expenses and other assets               70.1              51.8
    Future income tax benefits                      74.3              68.8
        Total current assets                     2,499.7           2,396.7

  Other assets:
    Intangible assets, net                         469.4             247.6
    Investments in licensees                        42.7              41.8
    Other assets                                   170.8             163.9
        Total other assets                         682.9             453.3

  Property and equipment:
    Property and equipment                         470.3             440.9
    Less:  accumulated depreciation and
     amortization                                  269.4             249.3
      Net property and equipment                   200.9             191.6
          Total assets                          $3,383.5          $3,041.6

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                            $  445.7          $  453.1
    Employee compensation payable                  100.3              81.2
    Accrued liabilities                            244.2             269.2
    Accrued payroll taxes and insurance            292.6             341.8
    Value added taxes payable                      318.5             311.0
    Short-term borrowings and current
      maturities of long-term debt                  17.7              65.9
        Total current liabilities                1,419.0           1,522.2

  Other liabilities:
    Long-term debt                                 879.2             491.6
    Other long-term liabilities                    287.4             287.4
        Total other liabilities                  1,166.6             779.0

  Shareholders' equity:
    Common stock                                     0.9               0.8
    Capital in excess of par value               1,639.9           1,631.4
    Accumulated deficit                           (405.9)           (496.9)
    Accumulated other comprehensive
     income (loss)                                (183.9)           (145.1)
    Treasury stock, at cost                       (253.1)           (249.8)
        Total shareholders' equity                 797.9             740.4
          Total liabilities and
           shareholders' equity                 $3,383.5          $3,041.6


                              Manpower Inc.
                  Consolidated Statements of Cash Flows
                        (In millions) - Unaudited

                                                       Nine Months Ended
                                                         September 30
                                                    2001              2000

  Cash Flows from Operating Activities:
    Net earnings                                  $ 98.6            $117.7
    Adjustments to reconcile net earnings
     to net cash provided by operating activities:
        Depreciation and amortization               62.3              52.0
        Deferred income taxes                       (6.6)             (7.5)
        Provision for doubtful accounts             15.4              17.3
        Changes in operating assets and
         liabilities:
          Amounts advanced under the
           Receivables Facility                   (102.0)            (70.0)
          Accounts receivable                       14.7            (321.2)
          Other assets                             (21.1)            (11.2)
          Other liabilities                         (3.7)            269.0
            Cash provided by operating activities   57.6              46.1

  Cash Flows from Investing Activities:
    Capital expenditures                           (66.6)            (50.9)
    Acquisitions of business, net of
     cash acquired                                (291.8)           (162.6)
    Proceeds from the sale of property
     and equipment                                   4.7               4.1
            Net cash used by investing
             activities                           (353.7)           (209.4)

  Cash Flows from Financing Activities:
    Net borrowings from short-term
     facilities and long-term debt                 356.4             156.9
    Proceeds from stock option and purchase plans    8.6               8.6
    Repurchase of common stock                      (3.3)            (20.0)
    Dividends paid                                  (7.6)             (7.6)
            Net cash provided by
             financing activities                  354.1             137.9

  Effect of exchange rate changes on cash           (6.8)            (41.0)
  Change in cash and cash equivalents               51.2             (66.4)

  Cash and cash equivalents, beginning
   of period                                       181.7             241.7
  Cash and cash equivalents, end of period        $232.9            $175.3

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SOURCE: Manpower Inc.

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

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


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