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Manpower Reports 3rd Quarter 2003 Results

PRNewswire-FirstCall
MILWAUKEE, Wis.
Oct 16, 2003

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended September 30, 2003 increased 8.0 percent to $43.8 million, or 56 cents per diluted share, from $40.5 million, or 52 cents per diluted share, a year earlier. Revenues for the third quarter totaled $3.2 billion, an increase of 11.0 percent from the year-earlier period. Systemwide sales were $3.5 billion. Results for the third 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 49 cents on a 1.8 percent revenue increase.

Jeffrey A. Joerres, Manpower Chairman and CEO, said: "Once again we were able to deliver a solid quarter despite the persistently difficult economic environment. We entered the third quarter anticipating a year-over-year deceleration across the network. In fact, most regions were flat to slightly positive. The result of the better performances in France and Europe accounted for the increase from anticipated earnings.

"This quarter, more than any other in 2003, we sensed stronger signals for a meaningful recovery. However, clearly we are unable to call an end to the current labor market challenges," stated Joerres. "Most importantly, while the staffing market in general is experiencing pricing pressure, our new and existing customers have recognized Manpower's value which contributed to the successful third quarter.

"As we look ahead to the fourth quarter, we are assuming no dramatic movements in any of the major geographies in which we operate. Therefore, we anticipate the fourth quarter earnings per share will be between 49 and 53 cents or $1.61 and $1.65 for 2003. We anticipate a 7 cent favorable impact from currency in the quarter."

Net income for the nine months ended September 30, 2003 totaled $87.8 million or $1.12 per diluted share, an increase of 20.2 percent from $73.1 million, or 94 cents per diluted share in 2002. Revenues for the nine-month period were $8.9 billion, an increase of 14.4% from the prior year. Systemwide sales were $9.8 billion. On a constant currency basis, earnings per diluted share for the nine-month period were 92 cents on a 2.0 percent revenue increase.

In conjunction with its third quarter earnings release, Manpower will broadcast its conference call live over the Internet on October 16, 2003 at 8:00 a.m. CDT (9:00 a.m. EDT). Interested parties are invited to listen by logging on to http://investor.manpower.com/.

The systemwide sales and constant currency amounts included in this press release are further explained on the attached Results of Operations. Supplemental financial information referenced in the conference call can be found at http://investor.manpower.com/.

Manpower Inc. is a world leader in the staffing industry, providing workforce management services and solutions to customers through 4,000 offices in 63 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/.

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, 2002, 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 September 30
                                                             % Variance
                                                          Amount  Constant
                                        2003      2002   Reported Currency
                                                   (Unaudited)

  Systemwide sales (a)                $3,510.3  $3,183.5   10.3%

  Revenue from services                3,203.2   2,885.9   11.0%       1.8%
  Cost of services                     2,653.6   2,373.6   11.8%

    Gross profit                         549.6     512.3    7.3%      -1.4%

  Selling and administrative expenses    470.8     435.1    8.2%       0.0%

    Operating profit                      78.8      77.2    2.0%      -9.3%

  Interest and other expenses              9.4      11.3  -17.5%

    Earnings before income taxes          69.4      65.9    5.4%

  Provision for income taxes              25.6      25.4    1.2%

    Net earnings                         $43.8     $40.5    8.0%      -5.0%



  Net earnings per share - basic         $0.56     $0.53    5.7%

  Net earnings per share - diluted       $0.56     $0.52    7.7%      -5.8%


  Weighted average shares - basic         77.7      76.6    1.4%

  Weighted average shares - diluted       78.8      77.4    1.8%


  (a)  Systemwide sales represents revenue from our branch offices plus the
       sales activity of locations operating under a franchise agreement
       with us. Systemwide sales is calculated as follows:

            Revenue from services     $3,203.2  $2,885.9
            Less:  Franchise fees          6.9       6.7
            Add:  Franchise sales        314.0     304.3
            Systemwide sales          $3,510.3  $3,183.5


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                          Three Months Ended September 30
                                                               % Variance
                                                            Amount Constant
                                           2003      2002  Reported Currency
                                                  (Unaudited)
  Revenues from services:
    United States (a)                     $500.6    $512.8   -2.4%   -2.4%
    France                               1,279.1   1,103.3   15.9%    1.3%
    EMEA                                   993.1     906.6    9.5%    0.1%
    Other Operations                       430.4     363.2   18.5%   13.6%
                                        $3,203.2  $2,885.9   11.0%    1.8%

  Operating Unit Profit:
    United States                          $11.0     $12.4  -11.7%  -11.7%
    France                                  51.3      40.6   26.4%   10.4%
    EMEA                                    17.3      28.5  -39.2%  -44.5%
    Other Operations                         7.6       2.7  177.5%  152.6%
                                            87.2      84.2
  Corporate expenses                         8.4       7.0
  Amortization of other intangible
   assets                                     --        --
      Operating profit                      78.8      77.2    2.0%   -9.3%
  Interest and other expenses (b)            9.4      11.3
      Earnings before income taxes         $69.4     $65.9


  (a)  Systemwide sales in the United States represents revenue from our
       branch offices plus the sales activity of locations operating under a
       franchise agreement with us. Systemwide sales in the United States
       is calculated as follows:

            Revenue from services          $500.6    $512.8
            Less:  Franchise fees             5.6       5.6
            Add:  Franchise sales           261.4     276.5
            Systemwide sales               $756.4    $783.7

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

          Interest expense                  $10.6     $11.5
          Interest income                    (1.5)     (1.9)
          Foreign exchange loss (gain)        0.6      (0.1)
          Miscellaneous, net                 (0.3)      1.8
                                             $9.4     $11.3


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

                                          Nine Months Ended September 30
                                                              % Variance
                                                          Amount   Constant
                                         2003      2002  Reported  Currency
                                                   (Unaudited)

  Systemwide sales (a)                 $9,751.3  $8,615.6  13.2%

  Revenue from services                 8,895.3   7,772.8  14.4%       2.0%
  Cost of services                      7,358.2   6,378.1  15.4%

    Gross profit                        1,537.1   1,394.7  10.2%      -1.7%

  Selling and administrative expenses   1,368.3   1,247.0   9.7%      -1.5%

    Operating profit                      168.8     147.7  14.3%      -2.9%

  Interest and other expenses              27.2      28.9  -6.0%

    Earnings before income taxes          141.6     118.8  19.2%

  Provision for income taxes               53.8      45.7  17.7%

    Net earnings                          $87.8     $73.1  20.2%      -1.2%



  Net earnings per share - basic          $1.13     $0.96  17.7%

  Net earnings per share - diluted        $1.12     $0.94  19.1%      -2.1%


  Weighted average shares - basic          77.5      76.2   1.7%

  Weighted average shares - diluted        78.4      77.6   1.0%


  (a)  Systemwide sales represents revenue from our branch offices plus the
       sales activity of locations operating under a franchise agreement
       with us.  Systemwide sales is calculated as follows:

            Revenue from services      $8,895.3  $7,772.8
            Less:  Franchise fees          18.8      19.0
            Add:  Franchise sales         874.8     861.8
            Systemwide sales           $9,751.3  $8,615.6


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                           Nine Months Ended September 30
                                                               % Variance
                                                            Amount  Constant
                                          2003      2002   Reported Currency
                                                     (Unaudited)
  Revenues from services:
    United States (a)                   $1,448.0  $1,416.4    2.2%    2.2%
    France                               3,405.7   2,813.7   21.0%    1.1%
    EMEA                                 2,830.7   2,500.9   13.2%   -1.3%
    Other Operations                     1,210.9   1,041.8   16.2%   12.0%
                                        $8,895.3  $7,772.8   14.4%    2.0%

  Operating Unit Profit:
    United States                          $24.0     $15.8   52.2%   52.2%
    France                                 120.1      95.5   25.8%    5.4%
    EMEA                                    34.7      56.2  -38.2%  -45.7%
    Other Operations                        16.5       2.5  528.6%  462.3%
                                           195.3     170.0
  Corporate expenses                        26.5      22.2
  Amortization of other intangible
   assets                                     --       0.1
      Operating profit                     168.8     147.7   14.3%   -2.9%
  Interest and other expenses (b)           27.2      28.9
      Earnings before income taxes        $141.6    $118.8


  (a)  Systemwide sales in the United States represents revenue from our
       branch offices plus the sales activity of locations operating under a
       franchise agreement with us. Systemwide sales in the United States is
       calculated as follows:

            Revenue from services        $1,448.0  $1,416.4
            Less:  Franchise fees            15.7      16.0
            Add:  Franchise sales           739.4     761.7
            Systemwide sales             $2,171.7  $2,162.1

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

          Interest expense                  $31.0     $31.9
          Interest income                    (6.0)     (6.6)
          Foreign exchange gains             (0.9)     (0.8)
          Miscellaneous, net                  3.1       4.4
                                            $27.2     $28.9


                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                Sept. 30          Dec. 31
                                                  2003              2002
                                               (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $287.5            $284.0
    Accounts receivable, net                     2,576.3           2,214.2
    Prepaid expenses and other assets               76.7              76.0
    Future income tax benefits                      81.0              79.1
        Total current assets                     3,021.5           2,653.3

  Other assets:
    Goodwill and other intangible
     assets, net                                   563.1             545.7
    Investments in licensees                        64.8              60.5
    Other assets                                   312.4             253.4
        Total other assets                         940.3             859.6

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    582.0             533.4
    Less:  accumulated depreciation and
     amortization                                  396.6             344.6
     Net property and equipment                    185.4             188.8
          Total assets                          $4,147.2          $3,701.7

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $524.3            $447.0
    Employee compensation payable                  115.3              96.2
    Accrued liabilities                            372.3             295.7
    Accrued payroll taxes and insurance            420.4             391.6
    Value added taxes payable                      391.7             309.0
    Short-term borrowings and current
      maturities of long-term debt                  14.2              22.8
      Total current liabilities                  1,838.2           1,562.3

  Other liabilities:
    Long-term debt                                 788.0             799.0
    Other long-term liabilities                    339.7             340.5
        Total other liabilities                  1,127.7           1,139.5

  Shareholders' equity:
    Common stock                                     0.9               0.9
    Capital in excess of par value               1,714.9           1,696.2
    Accumulated deficit                           (209.7)           (289.7)
    Accumulated other comprehensive
     income (loss)                                 (41.0)           (123.7)
    Treasury stock, at cost                       (283.8)           (283.8)
        Total shareholders' equity               1,181.3             999.9
        Total liabilities and
          shareholders' equity                  $4,147.2          $3,701.7


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

                                                      Nine Months Ended
                                                         September 30
                                                    2003              2002
                                                          (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                   $87.8             $73.1
    Adjustments to reconcile net
     earnings to net cash provided
     by operating activities:
      Depreciation and amortization                 46.5              48.9
      Amortization of discount on
       convertible debentures                        5.6               5.5
      Deferred income taxes                          1.8               3.0
      Provision for doubtful accounts               14.4              15.2
       Changes in operating assets and
        liabilities:
        Accounts receivable                       (186.4)           (172.8)
        Other assets                               (23.4)             26.2
        Other liabilities                          149.4              71.0
            Cash provided by operating
            activities                              95.7              70.1

  Cash Flows from Investing Activities:
    Capital expenditures                           (38.9)            (40.2)
    Acquisitions of business, net of
     cash acquired                                  (3.6)            (31.2)
    Proceeds from the sale of property
     and equipment                                   2.2               2.2
            Cash used by investing
             activities                            (40.3)            (69.2)

  Cash Flows from Financing Activities:
    Net repayments of short-term
     facilities and long-term debt                 (80.7)            (19.7)
    Proceeds from stock option and
     purchase plans                                 18.7              30.4
    Repurchase of common stock                        -              (30.7)
    Dividends paid                                  (7.8)             (7.6)
            Cash used by financing
             activities                            (69.8)            (27.6)

  Effect of exchange rate changes on
   cash                                             17.9              17.5
  Change in cash and cash equivalents                3.5              (9.2)

  Cash and cash equivalents, beginning
   of period                                       284.0             245.8
  Cash and cash equivalents, end of
   period                                         $287.5            $236.6

SOURCE: Manpower Inc.

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

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


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