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Manpower Reports 2nd Quarter and First Half 2002 Results

PRNewswire-FirstCall
MILWAUKEE
Jul 17, 2002

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended June 30, 2002 declined 26 percent to $25.7 million, or 33 cents per diluted share, from $34.6 million, or 45 cents per diluted share, a year earlier. Included in 2001 net income is $3.4 million (net of income taxes) or 4 cents per diluted share of amortization of intangible assets which are no longer amortized, as required by the new accounting rules effective January 1, 2002. Revenues for the second quarter totaled $2.6 billion, a decline of less than 1 percent from the year-earlier period. Systemwide sales were $2.9 billion. Results for the second quarter were positively affected by relatively stronger foreign currencies compared to the prior year period. On a constant currency basis, earnings per diluted share for the quarter were 30 cents on a 3 percent revenue decline.

"The second quarter showed continued improvement in the trends, particularly in the U.S.," Manpower Chairman and CEO, Jeffrey A. Joerres, stated. "While we must remain cautious based on all of the conflicting economic indicators, our U.S. operation is clearly experiencing a recovery. The demand from our light manufacturing customers is leading the way and our office and professional services groups are also showing early signs of improvement. We have also experienced improving trends in some of our European operations, including France, but at a much more modest rate.

"Given our current trends, we anticipate our third quarter earnings per share to be in the range of 43 to 47 cents, which includes an estimated favorable currency impact of 4 cents," Mr. Joerres said.

Net income for the six months ended June 30, 2002 totaled $32.6 million or 42 cents per diluted share, down 47 percent from $61.5 million, or 80 cents per diluted share in 2001. Included in 2001 net income for the six months is $6.6 million (net of income taxes) or 9 cents per diluted share of amortization of intangible assets. Revenues for the six-month period were $4.9 billion, a decline of 7% from the prior year. Systemwide sales were $5.4 billion. On a constant currency basis, earnings per diluted share for the six-month period were 40 cents on a revenue decline of 7%.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 17, 2002 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 3,900 offices in 61 countries. The firm annually provides employment to 2 million people worldwide and is an industry leader in employee assessment and training. Manpower also provides a range of staffing solutions and 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/ , which includes a comprehensive Investor Relations section.

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, 2001, which information is incorporated herein by reference.

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

                                                    Three Months Ended
                                                         June 30
                                             2002          2001     Variance
                                                       (Unaudited)

  Systemwide sales                         $2,892.1     $2,944.1      -1.9%
  Revenue from services                     2,602.9      2,620.1      -0.7%
  Cost of services                          2,135.3      2,131.0       0.2%
    Gross profit                              467.6        489.1      -4.4%
  Selling and administrative expenses         415.8        426.4      -2.5%
    Operating profit                           51.8         62.7     -17.4%
  Interest and other expenses                   9.6          8.6      11.9%
    Earnings before income taxes               42.2         54.1     -22.0%
  Provision for income taxes                   16.5         19.5     -15.2%
    Net earnings                              $25.7        $34.6     -25.8%
  Net earnings per share - basic              $0.34        $0.46     -26.1%
  Net earnings per share - diluted            $0.33        $0.45     -26.7%
  Weighted average shares - basic              75.9         75.8       0.1%
  Weighted average shares - diluted            77.5         76.9       0.8%


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

                                                    Six Months Ended
                                                        June 30
                                             2002         2001      Variance
                                                       (Unaudited)

  Systemwide sales                         $5,432.1     $5,955.2      -8.8%
  Revenue from services                     4,886.9      5,272.0      -7.3%
  Cost of services                          4,004.5      4,299.0      -6.9%
    Gross profit                              882.4        973.0      -9.3%
  Selling and administrative expenses         811.9        858.2      -5.4%
    Operating profit                           70.5        114.8     -38.6%
  Interest and other expenses                  17.6         18.8      -6.9%
    Earnings before income taxes               52.9         96.0     -44.9%
  Provision for income taxes                   20.3         34.5     -41.1%
    Net earnings                              $32.6        $61.5     -47.0%
  Net earnings per share - basic              $0.43        $0.81     -46.9%
  Net earnings per share - diluted            $0.42        $0.80     -47.5%
  Weighted average shares - basic              76.0         75.8       0.2%
  Weighted average shares - diluted            77.6         76.9       0.9%


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                             Three Months Ended June 30
                                                               % Variance
                                                            Amount  Constant
                                           2002      2001  Reported Currency
                                                    (Unaudited)
  Revenues from services:
    United States (a)                      $474.9    $523.5   -9.3%   -9.3%
    France                                  943.3     948.6   -0.6%   -5.6%
    United Kingdom                          332.4     369.6  -10.1%  -12.8%
    Other Europe                            497.7     475.3    4.7%   -0.1%
    Other Operations                        354.6     303.1   16.9%   21.0%
                                         $2,602.9  $2,620.1   -0.7%   -3.3%
  Operating Unit Profit:
    United States                            $8.3     $12.2  -32.6%  -32.6%
    France                                   32.7      35.4   -7.6%  -12.9%
    United Kingdom                            4.3      10.2  -57.4%  -58.0%
    Other Europe                             15.6      17.7  -11.9%  -16.5%
    Other Operations                          1.6       1.1   42.9%    8.1%
                                             62.5      76.6
  Corporate expenses                         10.6      10.0
  Amortization of intangibles                 0.1       3.9
      Operating profit                       51.8      62.7  -17.4%  -22.3%
  Interest and other expense (b)              9.6       8.6
      Earnings before taxes                 $42.2     $54.1


  Footnotes:
  (a) Systemwide sales in the United States, which includes sales of
      Company-owned branches and franchises were $721.4 and $801.5 for the
      three months ended June 30, 2002 and 2001, respectively.

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

        Interest expense                    $10.5      $8.7
        Interest income                      (2.1)     (2.4)
        Foreign exchange (gains) losses      (0.9)     (0.9)
        Loss on sale of accounts
         receivable                           0.1       1.7
        Miscellaneous, net                    2.0       1.5
                                             $9.6      $8.6


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                              Six Months Ended June 30
                                                               % Variance
                                                            Amount  Constant
                                           2002      2001  Reported Currency
                                                    (Unaudited)
  Revenues from services:
    United States (a)                      $903.6  $1,069.8  -15.5%  -15.5%
    France                                1,710.4   1,887.8   -9.4%   -9.8%
    United Kingdom                          654.6     750.5  -12.8%  -13.1%
    Other Europe                            939.7     974.6   -3.6%   -3.5%
    Other Operations                        678.6     589.3   15.2%   21.5%
                                         $4,886.9  $5,272.0   -7.3%   -6.8%
  Operating Unit Profit:
    United States                            $3.4     $20.4  -83.5%  -83.5%
    France                                   54.9      61.7  -11.1%  -12.3%
    United Kingdom                            7.5      19.9  -62.5%  -62.4%
    Other Europe                             26.1      37.0  -29.5%  -30.4%
    Other Operations                         (0.2)      3.0    N/A     N/A
                                             91.7     142.0
  Corporate expenses                         21.1      19.6
  Amortization of intangibles                 0.1       7.6
      Operating profit                       70.5     114.8  -38.6%  -40.0%
  Interest and other expense (b)             17.6      18.8
      Earnings before taxes                 $52.9     $96.0


  Footnotes:

  (a) Systemwide sales in the United States, which includes sales of
      Company-owned branches and franchises were $1,378.3 and $1,663.0 for
      the six months ended June 30, 2002 and 2001, respectively.

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

        Interest expense                    $20.4     $17.4
        Interest income                      (4.7)     (5.0)
        Foreign exchange (gains) losses      (0.7)     (0.2)
        Loss on sale of accounts
         receivable                           0.2       4.0
        Miscellaneous, net                    2.4       2.6
                                            $17.6     $18.8


                      Manpower Inc.
               Consolidated Balance Sheets
                      (In millions)

                                     Jun. 30   Dec. 31
                                       2002      2001
                                   (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents         $249.0    $245.8
    Accounts receivable, net         2,226.8   1,917.8
    Prepaid expenses and other
     assets                             78.7      77.0
    Future income tax benefits          74.5      73.8
      Total current assets           2,629.0   2,314.4
  Other assets:
    Intangible assets, net             528.5     480.8
    Investments in licensees            59.9      44.7
    Other assets                       229.1     204.7
      Total other assets               817.5     730.2
  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment        505.1     465.4
    Less:  accumulated depreciation
     and amortization                  310.1     271.4
      Net property and equipment       195.0     194.0
        Total assets                $3,641.5  $3,238.6

  LIABILITIES AND SHAREHOLDERS'
   EQUITY
  Current liabilities:
    Accounts payable                  $546.8    $382.1
    Employee compensation payable       98.6      93.2
    Accrued liabilities                273.2     234.9
    Accrued payroll taxes and
     insurance                         294.2     300.8
    Value added taxes payable          298.4     255.9
    Short-term borrowings and
     current maturities of long-term
     debt                              175.0     116.8
      Total current liabilities      1,686.2   1,383.7
  Other liabilities:
    Long-term debt                     743.8     718.0
    Other long-term liabilities        329.1     322.6
      Total other liabilities        1,072.9   1,040.6
  Shareholders' equity:
    Common stock                         0.9       0.9
    Capital in excess of par value   1,686.0   1,644.9
    Accumulated deficit               (362.6)   (387.6)
    Accumulated other comprehensive
     income (loss)                    (158.1)   (190.8)
    Treasury stock, at cost           (283.8)   (253.1)
      Total shareholders' equity       882.4     814.3
        Total liabilities and
         shareholders' equity       $3,641.5  $3,238.6


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

                                                      Six Months Ended
                                                           June 30
                                                    2002              2001
                                                         (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                   $32.6             $61.5
    Adjustments to reconcile net
     earnings to net cash provided by
     operating activities:
      Depreciation and amortization                 32.8              37.1
      Deferred income taxes                          2.4              (4.2)
      Provision for doubtful accounts                9.1              10.1
      Changes in operating assets and
       liabilities:
        Amounts advanced under the
         Receivables Facility                        ---             (80.0)
        Accounts receivable                       (146.4)             28.3
        Other assets                                19.3             (40.8)
        Other liabilities                           88.3              50.1
          Cash provided by operating
           activities                               38.1              62.1
  Cash Flows from Investing Activities:
    Capital expenditures                           (31.0)            (43.9)
    Acquisitions of business, net of
     cash acquired                                 (29.6)            (96.1)
    Proceeds from the sale of property
     and equipment                                   1.5               3.2
      Cash used by investing activities            (59.1)           (136.8)
  Cash Flows from Financing Activities:
    Net borrowings from short-term
     facilities and long-term debt                  17.3              79.2
    Proceeds from stock option and
     purchase plans                                 26.1               7.4
    Repurchase of common stock                     (30.7)             (3.3)
    Dividends paid                                  (7.6)             (7.6)
      Cash provided by financing activities          5.1              75.7
  Effect of exchange rate changes on
   cash                                             19.1             (13.0)
  Change in cash and cash equivalents                3.2             (12.0)
  Cash and cash equivalents, beginning
   of period                                       245.8             181.7
  Cash and cash equivalents, end of
   period                                         $249.0            $169.7

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SOURCE: Manpower Inc.

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

Web site: http://investor.manpower.com/

Web site: http://www.manpower.com/


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