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Manpower Reports 4th Quarter and Full-Year 2001 Results

PRNewswire-FirstCall
MILWAUKEE
Jan 30, 2002

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended December 31, 2001 declined 52 percent to $26.0 million, or 34 cents per diluted share, from $53.5 million, or 70 cents per diluted share, a year earlier. Revenues for the fourth quarter totaled $2.5 billion, a decline of 7 percent from the year-earlier period. Changes in foreign currency exchange rates between years did not materially impact revenues or net income in the quarter.

Commenting on the results, Manpower Chairman and CEO Jeffrey Joerres stated, "We entered the quarter knowing it was going to be a challenging environment throughout all of the major countries that we operate in, therefore, we were well prepared with our expense controls while we continued to focus on the protection of our customer relationships. As we look to the first quarter of 2002, we do not anticipate an economic turn in most of our global markets, and we expect revenues to lag the prior year. We are estimating earnings for the first quarter to be in the range of 6 to 10 cents per share."

Net income for the year ended December 31, 2001 totaled $124.5 million, or $1.62 per diluted share, a decline of 27 percent from $171.2 million, or $2.22 per diluted share in 2000. Revenues for the year declined 3 percent to $10.5 billion. On a constant currency basis, earnings per share for the year declined 23% on stable revenues.

In conjunction with its fourth quarter earnings release, Manpower will broadcast its conference call live over the Internet on January 30, 2002 at 9:00 a.m. CST (10:00 a.m. EST). 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 3,900 offices in 61 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 website, 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)

                                                   Three Months Ended
                                                       December 31
                                               2001         2000       Var.
                                                       (Unaudited)

  Systemwide sales                         $2,823.7     $3,121.3      -9.5%

  Revenue from services                     2,536.4      2,739.5      -7.4%
  Cost of services                          2,057.5      2,223.9      -7.5%

    Gross profit                              478.9        515.6      -7.1%

  SG&A expenses                               424.6        420.7       0.9%

    Operating profit                           54.3         94.9     -42.7%

  Interest and other expenses                  10.4         12.2     -13.7%

    Earnings before income taxes               43.9         82.7     -47.0%

  Provision for income taxes                   17.9         29.2     -38.3%

    Net earnings                           $   26.0     $   53.5     -51.7%

  Net earnings per share:

      Basic                                $   0.34     $   0.71     -52.1%

      Diluted                              $   0.34     $   0.70     -51.4%

  Weighted average shares:

      Basic                                    76.0         75.7       0.4%

      Diluted                                  77.0         76.8       0.2%


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

                                                    Year Ended
                                                   December 31
                                               2001         2000      Var.


  Systemwide sales                        $11,779.1    $12,444.9     -5.3%

  Revenue from services                    10,483.8     10,842.8     -3.3%
  Cost of services                          8,527.3      8,896.1     -4.1%

    Gross profit                            1,956.5      1,946.7      0.5%

  SG&A expenses                             1,718.9      1,635.7      5.1%

    Operating profit                          237.6        311.0    -23.6%

  Interest and other expenses                  39.7         45.8    -13.2%

    Earnings before income taxes              197.9        265.2    -25.4%

  Provision for income taxes                   73.4         94.0    -21.8%

    Net earnings                          $   124.5    $   171.2    -27.3%

  Net earnings per share:

      Basic                               $    1.64    $    2.26    -27.4%

      Diluted                             $    1.62    $    2.22    -27.0%

  Weighted average shares:

      Basic                                    75.9         75.9      0.0%

      Diluted                                  77.0         77.1     -0.1%


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                           Three Months Ended December 31
                                                               % Variance
                                                            Amount Constant
                                           2001      2000 Reported Currency
                                                       (Unaudited)
  Revenues from services:
    United States (a)                  $  451.2  $  601.9   -25.0%   -25.0%
    France                                887.1     968.2    -8.4%   -11.0%
    United Kingdom                        361.0     372.6    -3.1%    -2.8%
    Other Europe                          483.3     496.7    -2.7%    -3.8%
    Other Countries                       353.8     300.1    17.8%    26.1%
                                       $2,536.4  $2,739.5    -7.4%    -7.6%

  Operating Unit Profit:
    United States                      $    0.5  $   21.1   -97.7%   -97.7%
    France                                 36.8      39.0    -5.8%    -8.5%
    United Kingdom                         10.8      13.7   -20.8%   -21.1%
    Other Europe                           18.3      31.9   -42.5%   -43.6%
    Other Countries                         2.8       3.7   -18.0%     3.0%
                                           69.2     109.4
  Corporate expenses                       10.1      11.2
  Amortization of intangibles               4.8       3.3
      Operating profit                     54.3      94.9   -42.7%   -43.4%
  Interest and other expense (b)           10.4      12.2
      Earnings before taxes            $   43.9  $   82.7


  Footnotes:

  (a) Total systemwide sales in the United States, which includes sales of
      Company-owned branches and franchises were $694.6 and $936.8 for 2001
      and 2000, respectively.

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

            Interest expense             $   10.9  $    9.4
            Interest income                  (2.8)     (1.8)
            Translation loss (gain)           0.7       0.4
            Loss on sale of accounts
             receivable                       0.2       2.4
            Miscellaneous                     1.4       1.8
                                         $   10.4  $   12.2


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                              Year Ended December 31
                                                             % Variance
                                                           Amount  Constant
                                         2001       2000 Reported  Currency

  Revenues from services:
    United States (a)               $ 2,003.4  $ 2,413.5   -17.0%    -17.0%
    France                            3,766.4    3,939.2    -4.4%     -1.6%
    United Kingdom                    1,489.3    1,453.1     2.5%      7.9%
    Other Europe                      1,939.4    1,896.3     2.3%      6.8%
    Other Countries                   1,285.3    1,140.7    12.7%     22.4%
                                    $10,483.8  $10,842.8    -3.3%      0.4%

  Operating Unit Profit:
    United States                   $    29.5  $    84.6   -65.2%    -65.2%
    France                              135.7      130.6     3.9%      6.5%
    United Kingdom                       44.5       46.2    -3.8%      1.3%
    Other Europe                         75.9       89.1   -14.8%    -11.5%
    Other Countries                       8.9       13.2   -31.9%    -15.1%
                                        294.5      363.7
  Corporate expenses                     39.9       39.4
  Amortization of intangibles            17.0       13.3
      Operating profit                  237.6      311.0   -23.6%    -20.0%
  Interest and other expense (b)         39.7       45.8
      Earnings before taxes         $   197.9  $   265.2


  Footnotes:

  (a) Total systemwide sales in the United States, which includes sales of
      Company-owned branches and franchises were $3,114.8 and $3,814.9 for
      2001 and 2000, respectively.

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

            Interest expense           $    39.1  $    35.0
            Interest income                (10.3)      (7.3)
            Translation loss (gain)          0.2        2.3
            Loss on sale of accounts
             receivable                      5.3        9.8
            Miscellaneous                    5.4        6.0
                                       $    39.7  $    45.8


                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                 Dec. 31           Dec. 31
                                                    2001              2000

  ASSETS
  Current assets:
    Cash and cash equivalents                   $  245.8          $  181.7
    Accounts receivable, net                     1,917.8           2,094.4
    Prepaid expenses and other assets               77.0              51.8
    Future income tax benefits                      73.8              68.8
        Total current assets                     2,314.4           2,396.7

  Other assets:
    Intangible assets, net                         480.8             247.6
    Investments in licensees                        44.7              41.8
    Other assets                                   204.7             163.9
        Total other assets                         730.2             453.3

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    465.4             440.9
    Less:  accumulated depreciation and
     amortization                                  271.4             249.3
      Net property and equipment                   194.0             191.6
          Total assets                          $3,238.6          $3,041.6

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                            $  382.1          $  453.1
    Employee compensation payable                   93.2              81.2
    Accrued liabilities                            234.9             269.2
    Accrued payroll taxes and insurance            300.8             341.8
    Value added taxes payable                      255.9             311.0
    Short-term borrowings and current
      maturities of long-term debt                  23.7              65.9
        Total current liabilities                1,290.6           1,522.2

  Other liabilities:
    Long-term debt                                 811.1             491.6
    Other long-term liabilities                    322.6             287.4
        Total other liabilities                  1,133.7             779.0

  Shareholders' equity:
    Common stock                                     0.9               0.8
    Capital in excess of par value               1,644.9           1,631.4
    Accumulated deficit                           (387.6)           (496.9)
    Accumulated other comprehensive
     income (loss)                                (190.8)           (145.1)
    Treasury stock, at cost                       (253.1)           (249.8)
        Total shareholders' equity                 814.3             740.4
          Total liabilities and
           shareholders' equity                 $3,238.6          $3,041.6


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

                                                          Year Ended
                                                          December 31
                                                    2001              2000

  Cash Flows from Operating Activities:
    Net earnings                                  $124.5            $171.2
    Adjustments to reconcile net
     earnings to net
      cash provided by operating
       activities:
        Depreciation and amortization               80.2              66.8
        Deferred income taxes                       (7.3)            (15.8)
        Provision for doubtful accounts             23.8              21.7
        Changes in operating assets and
         liabilities:
          Amounts advanced under the
           Receivables Facility                   (145.0)            (55.0)
          Accounts receivable                      217.3            (261.2)
          Other assets                             (69.1)            (32.6)
          Other liabilities                        (88.4)            262.8
            Cash provided by operating
             activities                            136.0             157.9

  Cash Flows from Investing Activities:
    Capital expenditures                           (87.3)            (82.6)
    Acquisitions of business, net of
     cash acquired                                (295.9)           (172.4)
    Proceeds from the sale of property
     and equipment                                  16.1               7.3
            Net cash used by investing
             activities                           (367.1)           (247.7)

  Cash Flows from Financing Activities:
    Net borrowings from short-term
     facilities
      and long-term debt                           313.0              71.8
    Proceeds from stock option and
     purchase plans                                 13.6              10.0
    Repurchase of common stock                      (3.3)            (20.0)
    Dividends paid                                 (15.2)            (15.1)
            Net cash provided by
             financing activities                  308.1              46.7

  Effect of exchange rate changes on
   cash                                            (12.9)            (16.9)
  Change in cash and cash equivalents               64.1             (60.0)

  Cash and cash equivalents, beginning
   of period                                       181.7             241.7
  Cash and cash equivalents, end of
   period                                         $245.8            $181.7

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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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