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Manpower Reports 2nd Quarter and First Half 2004 Results

PRNewswire-FirstCall
MILWAUKEE
Jul 20, 2004

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended June 30, 2004 was $53.1 million, or 56 cents per diluted share, an increase of 82 percent, from $29.1 million, or 37 cents per diluted share, a year earlier. Revenues for the second quarter totaled $3.6 billion, an increase of 20 percent from the year-earlier period. 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 54 cents on a 14 percent improvement in revenues.

"The second quarter results continued to endorse the power of our business strategies and the effectiveness of our execution. The Manpower team again delivered results through exceptional focus and a high level of energy throughout our network," stated Jeffrey A. Joerres, Chairman and CEO of Manpower Inc.

"Both long-term and newly acquired customers are accelerating their use of flexible talent. This increased demand is not only fueling our core business, but is also fueling our unique offerings in financial services, organizational consulting and career transition services. Jefferson Wells grew revenue 131% in the second quarter, the EMEA segment grew at 17.8% in constant currency, and our U.S. operation more than doubled their growth rate, compared to the first quarter of 2004.

"Our organization remains focused on delivering solutions to our customers that only the combined strength of Manpower's unique array of services can provide to meet their needs through the entire business and employment lifecycle. We continue to strengthen our position by expanding our customer relationships and increasing the efficiency of our organization.

"We are anticipating the third quarter of 2004 diluted earnings per share will be in the range of 63 to 67 cents. This includes an estimated positive currency impact of 4 cents," Joerres stated.

Net income for the six months ended June 30, 2004 totaled $92.7 million or $1.01 per diluted share, an increase of 110 percent from $44.0 million, or 56 cents per diluted share in 2003. Revenues for the six-month period were $7.0 billion, an increase of 22 percent from the prior year. On a constant currency basis, earnings per diluted share for the six-month period were 94 cents on a 13 percent improvement in revenues.

Included in the six-month period was a first quarter non-recurring gain of $14.2 million ($10.2 million net of income taxes), or 12 cents per diluted share, primarily related to the gain on the sale of an equity interest in a European internet job board.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 20, 2004 at 8:00 a.m. CDT (9:00 a.m. EDT). Interested parties are invited to listen to the webcast by logging on to http://investor.manpower.com/ .

Supplemental financial information referenced in the conference call can be found at http://investor.manpower.com/ .

About Manpower Inc.

Manpower Inc. (NYSE: MAN) is a world leader in the employment services industry, offering customers a continuum of services to meet their needs throughout the employment and business cycle. The company specializes in permanent, temporary and contract recruitment; employee assessment; training; career transition and organizational consulting services. Manpower's worldwide network of 4,300 offices in 67 countries and territories enables the company to meet the needs of its 400,000 customers per year, including small and medium size enterprises in all industry sectors, as well as the world's largest multinational corporations. The focus of Manpower's work is on raising productivity through improved quality, efficiency and cost-reduction, enabling customers to concentrate on their core business activities. In addition to the Manpower brand, the company operates under the brand names of Right Management Consultants, Jefferson Wells, Elan and Brook Street. More information on Manpower Inc. is available at http://www.manpower.com/ .

Forward-Looking Statements

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 the information under the heading 'Forward-Looking Statements' in its Annual Report on Form 10-K for the year ended December 31, 2003, which information is incorporated herein by reference.

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

                                           Three Months Ended June 30
                                                             % Variance
                                                           Amount  Constant
                                          2004      2003  Reported Currency
                                                    (Unaudited)

  Revenues from services (a)            $3,622.4  $3,013.4  20.2%    14.3%

  Cost of services                       2,943.1   2,491.9  18.1%

    Gross profit                           679.3     521.5  30.2%    24.3%

  Selling and administrative expenses      584.1     464.5  25.7%    19.9%

    Operating profit                        95.2      57.0  67.0%    60.0%

  Interest and other expenses               12.3       9.2  34.0%

    Earnings before income taxes            82.9      47.8  73.4%

  Provision for income taxes                29.8      18.7  60.0%

    Net earnings                           $53.1     $29.1  81.9%    76.9%


  Net earnings per share - basic           $0.59     $0.38  55.3%

  Net earnings per share - diluted         $0.56     $0.37  51.4%    45.9%


  Weighted average shares - basic           89.6      77.5  15.5%

  Weighted average shares - diluted         97.4      78.3  24.4%

   (a)  Revenues from services include fees received from our franchise
        offices of $7.9 million and $5.9 million for the three months ended
        June 30, 2004 and 2003, respectively.  These fees are primarily
        based on revenues generated by the franchise offices, which were
        $350.4 million and $294.1 million for the three months ended
        June 30, 2004 and 2003, respectively.


                              Manpower Inc.
                          Operating Unit Results
                              (In millions)

                                             Three Months Ended June 30
                                                             % Variance
                                                            Amount  Constant
                                           2004      2003  Reported Currency
                                                     (Unaudited)
  Revenues from Services:
    United States (a)                      $517.3    $483.9    6.9%    6.9%
    France                                1,278.3   1,172.0    9.1%    2.9%
    EMEA                                  1,202.2     951.2   26.4%   17.8%
    Right (b)                               119.9      16.7     N/A     N/A
    Other Operations                        504.7     389.6   29.6%   24.9%
                                         $3,622.4  $3,013.4   20.2%   14.3%

  Operating Unit Profit:
    United States                           $14.1     $10.3   36.2%   36.2%
    France                                   39.4      41.9   -5.6%  -10.8%
    EMEA                                     26.2       7.6  240.0%  219.4%
    Right                                    12.6      (0.4)    N/A     N/A
    Other Operations                         20.7       6.9  206.9%  203.6%
                                            113.0      66.3
  Corporate expenses                         14.4       9.3
  Amortization of intangible assets           3.4        -
      Operating profit                       95.2      57.0   67.0%   60.0%
  Interest and other expenses (c)            12.3       9.2
      Earnings before income taxes          $82.9     $47.8

   (a)  In the United States, revenues from services include fees received
        from the related franchise offices of $5.8 million and $4.9 million
        for the three months ended June 30, 2004 and 2003, respectively.
        These fees are primarily based on revenues generated by the
        franchise offices, which were $289.7 million and $248.4 million for
        the three months ended June 30, 2004 and 2003, respectively.

   (b)  Represents the operations of Right Management Consultants, since its
        acquisition in January 2004, and the Empower Group.

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

          Interest expense                  $12.0     $10.4
          Interest income                    (1.6)     (2.1)
          Foreign exchange losses (gains)     0.2      (0.3)
          Miscellaneous, net                  1.7       1.2
                                            $12.3      $9.2


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

                                              Six Months Ended June 30
                                                               % Variance
                                                            Amount  Constant
                                          2004      2003   Reported Currency
                                                      (Unaudited)
  Revenues from services (a)            $6,956.5  $5,692.1   22.2%  12.9%

  Cost of services                       5,660.7   4,704.6   20.3%

    Gross profit                         1,295.8     987.5   31.2%  21.7%

  Selling and administrative expenses    1,144.4     897.5   27.5%  18.3%

    Operating profit                       151.4      90.0   68.3%  55.5%

  Interest and other expenses                8.3      17.8  -53.3%

    Earnings before income taxes           143.1      72.2   98.2%

  Provision for income taxes                50.4      28.2   79.1%

    Net earnings                           $92.7     $44.0  110.4%  96.6%


  Net earnings per share - basic           $1.06     $0.57   86.0%

  Net earnings per share - diluted         $1.01     $0.56   80.4%  67.9%


  Weighted average shares - basic           87.7      77.4   13.3%

  Weighted average shares - diluted         92.9      78.2   18.9%

   (a)  Revenues from services include fees received from our franchise
        offices of $16.1 million and $11.9 million for the six months ended
        June 30, 2004 and 2003, respectively.  These fees are primarily
        based on revenues generated by the franchise offices, which were
        $671.9 million and $560.8 million for the six months ended June 30,
        2004 and 2003, respectively.


                              Manpower Inc.
                          Operating Unit Results
                              (In millions)

                                              Six Months Ended June 30
                                                               % Variance
                                                            Amount  Constant
                                           2004      2003  Reported Currency
                                                      (Unaudited)
  Revenues from Services:
    United States (a)                      $991.9    $947.4    4.7%    4.7%
    France                                2,414.8   2,126.6   13.5%    2.7%
    EMEA                                  2,343.1   1,837.6   27.5%   15.2%
    Right (b)                               221.7      32.0     N/A     N/A
    Other Operations                        985.0     748.5   31.6%   23.4%
                                         $6,956.5  $5,692.1   22.2%   12.9%

  Operating Unit Profit:
    United States                           $16.9     $13.0   29.6%   29.6%
    France                                   68.2      68.8   -0.8%   -9.7%
    EMEA                                     39.9      17.4  128.6%  110.9%
    Right                                    21.7      (1.0)    N/A     N/A
    Other Operations                         38.0       9.9  289.9%  268.9%
                                            184.7     108.1
  Corporate expenses                         27.6      18.1
  Amortization of intangible assets           5.7        -
      Operating profit                      151.4      90.0   68.3%   55.5%
  Interest and other expenses (c)             8.3      17.8
      Earnings before income taxes         $143.1     $72.2

   (a)  In the United States, revenues from services include fees received
        from the related franchise offices of $12.0 million and
        $10.1 million for the six months ended June 30, 2004 and 2003,
        respectively.  These fees are primarily based on revenues generated
        by the franchise offices, which were $552.7 million and
        $478.0 million for the six months ended June 30, 2004 and 2003,
        respectively.

   (b)  Represents the operations of Right Management Consultants, since its
        acquisition in January 2004, and the Empower Group.

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

          Interest expense                  $23.1     $20.4
          Interest income                    (4.0)     (4.5)
          Foreign exchange losses (gains)     0.3      (1.5)
          Miscellaneous (income)
           expense, net                     (11.1)      3.4
                                             $8.3     $17.8


                              Manpower Inc.
                       Consolidated Balance Sheets
                              (In millions)

                                                  Jun. 30           Dec. 31
                                                   2004              2003
                                                         (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $440.4            $426.2
    Accounts receivable, net                     2,882.0           2,609.4
    Prepaid expenses and other assets              148.0             100.1
    Future income tax benefits                     110.7             101.4
        Total current assets                     3,581.1           3,237.1

  Other assets:
    Goodwill and other intangible
     assets, net                                 1,241.3             573.8
    Investments in licensees                        62.9              66.2
    Other assets                                   257.5             320.7
        Total other assets                       1,561.7             960.7

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    632.1             606.3
    Less:  accumulated depreciation and
     amortization                                  423.2             419.2
      Net property and equipment                   208.9             187.1
          Total assets                          $5,351.7          $4,384.9

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $714.1            $555.4
    Employee compensation payable                  129.6             105.6
    Accrued liabilities                            476.0             360.0
    Accrued payroll taxes and insurance            486.7             476.6
    Value added taxes payable                      401.0             368.2
    Short-term borrowings and current
     maturities of long-term debt                  215.5              12.1
        Total current liabilities                2,422.9           1,877.9

  Other liabilities:
    Long-term debt                                 624.3             829.6
    Other long-term liabilities                    373.6             367.1
        Total other liabilities                    997.9           1,196.7

  Shareholders' equity:
    Common stock                                     1.0               0.9
    Capital in excess of par value               2,291.3           1,732.5
    Accumulated deficit                            (84.0)           (167.6)
    Accumulated other comprehensive
     income                                          6.4              28.3
    Treasury stock, at cost                       (283.8)           (283.8)
        Total shareholders' equity               1,930.9           1,310.3
          Total liabilities and
           shareholders' equity                 $5,351.7          $4,384.9


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

                                                      Six Months Ended
                                                           June 30
                                                    2004              2003
                                                          (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                   $92.7             $44.0
    Adjustments to reconcile net
     earnings to net cash provided by
     operating activities:
        Depreciation and amortization               41.4              31.4
        Amortization of discount on
         convertible debentures                      3.9               3.8
        Deferred income taxes                       (8.9)              4.7
        Provision for doubtful accounts             12.2               8.0
        Other non-operating gains                  (14.2)               -
        Changes in operating assets and
         liabilities excluding
         the impact of acquisitions:
            Accounts receivable                   (245.1)            (76.5)
            Other assets                            13.3             (25.8)
            Other liabilities                      172.3              28.1
              Cash provided by
               operating activities                 67.6              17.7

  Cash Flows from Investing Activities:
    Capital expenditures                           (27.0)            (23.8)
    Acquisitions of businesses, net of
     cash acquired                                (103.6)             (2.5)
    Proceeds from sale of an equity
     interest                                       29.8                -
    Proceeds from the sale of property
     and equipment                                   3.8               2.5
              Cash used by investing
               activities                          (97.0)            (23.8)

  Cash Flows from Financing Activities:
    Net borrowings (repayments) of
     short-term facilities and long-term debt        8.7             (44.5)
    Proceeds from stock option and
     purchase plans                                 52.8              13.9
    Dividends paid                                  (9.1)             (7.8)
              Cash provided (used) by
               financing activities                 52.4             (38.4)

  Effect of exchange rate changes on cash           (8.8)             12.6
  Change in cash and cash equivalents               14.2             (31.9)

  Cash and cash equivalents, beginning
   of period                                       426.2             284.0
  Cash and cash equivalents, end of
   period                                         $440.4            $252.1

SOURCE: Manpower Inc.

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

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


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