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Manpower Reports 3rd Quarter 2004 Results

PRNewswire-FirstCall
MILWAUKEE
Oct 19, 2004

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended September 30, 2004 increased 91 percent to $83.4 million, or 89 cents per diluted share, from $43.8 million, or 56 cents per diluted share, a year earlier. Revenues for the third quarter totaled $3.9 billion, an increase of 22 percent from the year-earlier period.

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 85 cents on a 14 percent revenue increase. Included in the quarter was an $8 million adjustment to the income tax provision, resulting in a favorable impact on diluted earnings per share of 8 cents.

"The strong third quarter profit is a result of solid performances across several geographies and business units," said Jeffrey A. Joerres, Manpower Chairman and CEO. "We are encouraged by the sustainable progress that we are making in our staffing and specialty businesses. The strength of the business models and demand from the market continue to enhance our long-term optimism.

"Leading the way in growth of both revenue and profit for the third quarter is Jefferson Wells, our professional financial services firm, with more than a tripling of revenue and a profit of $25.1 million. Operations in Europe are also performing well, with revenue in our EMEA segment up 20% and profit up 80%, both in constant currency."

Joerres added, "The Manpower team is executing superbly, which is driving the quarter's results and setting the stage for positive long-term prospects.

"As we look ahead to the fourth quarter, we are anticipating our diluted earnings per share will be between 69 and 73 cents. This includes an estimated favorable impact from currency of 2 cents and dilution from our convertible debentures of 3 cents."

Net income for the nine months ended September 30, 2004 totaled $176.1 million or $1.91 per diluted share, an increase of 101 percent from $87.8 million, or $1.12 per diluted share in 2003. Revenues for the nine- month period were $10.9 billion, an increase of 22% from the prior year. On a constant currency basis, earnings per diluted share for the nine-month period were $1.80 on a 13 percent revenue increase.

In addition to the previously discussed income tax adjustment of 8 cents per diluted share, the results for the nine-month period also include 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 third quarter earnings release, Manpower will broadcast its conference call live over the Internet on October 19, 2004 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/ .

Supplemental financial information referenced in the conference call can be found at http://investor.manpower.com/. Select "Financial Information" and then go to the section titled, "Financial Measures."

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 statements 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 September 30
                                                              % Variance
                                                            Amount  Constant
                                        2004       2003    Reported Currency
                                                    (Unaudited)

  Revenues from services (a)          $3,900.8   $3,203.2    21.8%   14.1%

  Cost of services                     3,172.7    2,653.6    19.6%

    Gross profit                         728.1      549.6    32.5%   24.7%

  Selling and administrative expenses    601.2      470.8    27.7%   20.2%

    Operating profit                     126.9       78.8    60.9%   51.2%

  Interest and other expenses              9.1        9.4    -3.9%

    Earnings before income taxes         117.8       69.4    69.7%

  Provision for income taxes              34.4       25.6    34.1%

    Net earnings                         $83.4      $43.8    90.6%   81.7%



  Net earnings per share - basic         $0.93      $0.56    66.1%

  Net earnings per share - diluted       $0.89      $0.56    58.9%   51.8%


  Weighted average shares - basic         90.0       77.7    15.8%

  Weighted average shares - diluted       93.9       78.8    19.1%


  (a)  Revenues from services include fees received from our franchise
       offices of $8.9 million and $6.9 million for the three months ended
       September 30, 2004 and 2003, respectively.  These fees are primarily
       based on revenues generated by the franchise offices, which were
       $397.0 million and $314.0 million for the three months ended
       September 30, 2004 and 2003, respectively.


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                          Three Months Ended September 30
                                                              % Variance
                                                            Amount  Constant
                                        2004       2003    Reported Currency
                                                    (Unaudited)
  Revenues from Services:
    United States (a)                  $531.8     $500.6      6.2%     6.2%
    France                            1,402.0    1,279.1      9.6%     1.0%
    EMEA                              1,305.4      993.1     31.4%    19.9%
    Jefferson Wells                     110.6       33.6    229.5%   229.5%
    Right (b)                           102.5       17.1       N/A      N/A
    Other Operations                    448.5      379.7     18.1%    13.7%
                                     $3,900.8   $3,203.2     21.8%    14.1%

  Operating Unit Profit:
    United States                       $15.6      $11.0     42.5%    42.5%
    France                               55.6       51.3      8.2%    -0.2%
    EMEA                                 33.9       17.3     96.9%    79.9%
    Jefferson Wells                      25.1       (3.7)      N/A      N/A
    Right                                 3.2        0.1       N/A      N/A
    Other Operations                     10.8       11.2     -4.6%    -8.5%
                                        144.2       87.2
  Corporate expenses                     14.0        8.4
  Amortization of intangible assets       3.3         -
      Operating profit                  126.9       78.8     60.9%    51.2%
  Interest and other expenses (c)         9.1        9.4
      Earnings before income taxes     $117.8      $69.4


  (a)  In the United States, revenues from services include fees received
       from the related franchise offices of $6.3 million and $5.6 million
       for the three months ended September 30, 2004 and 2003, respectively.
       These fees are primarily based on revenues generated by the franchise
       offices, which were $318.4 million and $261.4 million for the three
       months ended September 30, 2004 and 2003, respectively.

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

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

          Interest expense                  $10.9     $10.6
          Interest income                    (2.2)     (1.5)
          Foreign exchange (gains)
           losses                            (0.4)      0.6
          Miscellaneous, net                  0.8      (0.3)
                                             $9.1      $9.4



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

                                           Nine Months Ended September 30
                                                              % Variance
                                                            Amount  Constant
                                        2004       2003    Reported Currency
                                                    (Unaudited)

  Revenues from services (a)         $10,857.3   $8,895.3     22.1%   13.3%

  Cost of services                     8,833.4    7,358.2     20.0%

    Gross profit                       2,023.9    1,537.1     31.7%   22.8%

  Selling and administrative expenses  1,745.6    1,368.3     27.6%   19.0%

    Operating profit                     278.3      168.8     64.8%   53.5%

  Interest and other expenses             17.4       27.2    -36.2%

    Earnings before income taxes         260.9      141.6     84.2%

  Provision for income taxes              84.8       53.8     57.7%

    Net earnings                        $176.1      $87.8    100.5%   89.1%



  Net earnings per share - basic         $1.99      $1.13     76.1%

  Net earnings per share - diluted       $1.91      $1.12     70.5%   60.7%


  Weighted average shares - basic         88.5       77.5     14.2%

  Weighted average shares - diluted       93.3       78.4     18.9%


  (a)  Revenues from services include fees received from our franchise
       offices of $25.0 million and $18.8 million for the nine months ended
       September 30, 2004 and 2003, respectively.  These fees are primarily
       based on revenues generated by the franchise offices, which were
       $1,068.9 million and $874.8 million for the nine months ended
       September 30, 2004 and 2003, respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)


                                          Nine Months Ended September 30
                                                              % Variance
                                                            Amount  Constant
                                        2004       2003    Reported Currency
                                                    (Unaudited)
  Revenues from Services:
    United States (a)                $1,523.7   $1,448.0      5.2%     5.2%
    France                            3,816.8    3,405.7     12.1%     2.1%
    EMEA                              3,648.5    2,830.7     28.9%    16.8%
    Jefferson Wells                     237.7       98.9    140.4%   140.4%
    Right (b)                           324.2       49.1       N/A      N/A
    Other Operations                  1,306.4    1,062.9     22.9%    15.6%
                                    $10,857.3   $8,895.3     22.1%    13.3%

  Operating Unit Profit:
    United States                       $32.5      $24.0     35.5%    35.5%
    France                              123.8      120.1      3.1%    -5.6%
    EMEA                                 73.8       34.7    112.9%    95.5%
    Jefferson Wells                      38.2      (10.3)      N/A      N/A
    Right                                24.9       (0.9)      N/A      N/A
    Other Operations                     35.7       27.7     28.9%    19.9%
                                        328.9      195.3
  Corporate expenses                     41.6       26.5
  Amortization of intangible assets       9.0         -
      Operating profit                  278.3      168.8     64.8%    53.5%
  Interest and other expenses (c)        17.4       27.2
      Earnings before income taxes     $260.9     $141.6


  (a)  In the United States, revenues from services include fees received
       from the related franchise offices of $18.3 million and $15.7 million
       for the nine months ended September 30, 2004 and 2003, respectively.
       These fees are primarily based on revenues generated by the franchise
       offices, which were $871.1 million and $739.4 million for the nine
       months ended September 30, 2004 and 2003, respectively.

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

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

          Interest expense                  $34.0     $31.0
          Interest income                    (6.2)     (6.0)
          Foreign exchange gains             (0.1)     (0.9)
          Miscellaneous (income)
           expense, net                     (10.3)      3.1
                                            $17.4     $27.2



                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                  Sep. 30          Dec. 31
                                                    2004             2003
                                                         (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $414.8            $426.2
    Accounts receivable, net                     3,071.0           2,609.4
    Prepaid expenses and other assets              198.2             100.1
    Future income tax benefits                     114.0             101.4
        Total current assets                     3,798.0           3,237.1

  Other assets:
    Goodwill and other intangible
     assets, net                                 1,245.7             573.8
    Investments in licensees                        65.2              66.2
    Other assets                                   216.1             320.7
        Total other assets                       1,527.0             960.7

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    649.5             606.3
    Less:  accumulated depreciation and
     amortization                                  442.3             419.2
      Net property and equipment                   207.2             187.1
          Total assets                          $5,532.2          $4,384.9

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $665.2            $555.4
    Employee compensation payable                  144.7             105.6
    Accrued liabilities                            537.6             360.0
    Accrued payroll taxes and insurance            495.1             476.6
    Value added taxes payable                      434.0             368.2
    Short-term borrowings and current
      maturities of long-term debt                 208.2              12.1
        Total current liabilities                2,484.8           1,877.9

  Other liabilities:
    Long-term debt                                 640.7             829.6
    Other long-term liabilities                    370.6             367.1
        Total other liabilities                  1,011.3           1,196.7

  Shareholders' equity:
    Common stock                                     1.0               0.9
    Capital in excess of par value               2,296.1           1,732.5
    Accumulated deficit                             (0.6)           (167.6)
    Accumulated other comprehensive income          23.4              28.3
    Treasury stock, at cost                       (283.8)           (283.8)
        Total shareholders' equity               2,036.1           1,310.3
          Total liabilities and
           shareholders' equity                 $5,532.2          $4,384.9



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

                                                     Nine Months Ended
                                                        September 30
                                                   2004              2003
                                                        (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                  $176.1             $87.8
    Adjustments to reconcile net
     earnings to net cash provided by
     operating activities:
        Depreciation and amortization               62.6              46.5
        Amortization of discount on
         convertible debentures                      5.8               5.6
        Deferred income taxes                      (11.6)              1.8
        Provision for doubtful accounts             20.1              14.4
        Other non-operating gains                  (14.2)               -
        Changes in operating assets and
         liabilities excluding the impact
         of acquisitions:
            Accounts receivable                   (409.7)           (186.4)
            Other assets                            14.6             (23.4)
            Other liabilities                      218.4             149.4
              Cash provided by
               operating activities                 62.1              95.7

  Cash Flows from Investing Activities:
    Capital expenditures                           (42.7)            (38.9)
    Acquisitions of businesses, net of
     cash acquired                                (113.8)             (3.6)
    Proceeds from sale of an equity interest        29.8                -
    Proceeds from the sale of property
     and equipment                                   4.8               2.2
              Cash used by investing activities   (121.9)            (40.3)

  Cash Flows from Financing Activities:
    Net borrowings (repayments) of short-term
      facilities and long-term debt                  5.3             (80.7)
    Proceeds from stock option and
     purchase plans                                 55.4              18.7
    Dividends paid                                  (9.1)             (7.8)
              Cash provided (used) by
               financing activities                 51.6             (69.8)

  Effect of exchange rate changes on cash           (3.2)             17.9
  Change in cash and cash equivalents              (11.4)              3.5

  Cash and cash equivalents, beginning
   of period                                       426.2             284.0
  Cash and cash equivalents, end of period        $414.8            $287.5

SOURCE: Manpower Inc.

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

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


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