Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended December 31, 2004 increased 39 percent to $69.6 million, or 73 cents per diluted share, from $49.9 million, or 61 cents per diluted share, a year earlier. Revenues for the fourth quarter totaled $4.1 billion, an increase of 24 percent from the year-earlier period.
Results for the fourth 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 69 cents on a 16 percent revenue increase.
"The Manpower team executed well in the fourth quarter, reflecting the strength and momentum that we gained throughout 2004, with significant contributions from our European operations and Jefferson Wells, our financial professional services unit," said Jeffrey A. Joerres, Chairman and CEO of Manpower Inc.
"The fourth quarter also provided continuing evidence that the combined offering of Manpower and Right Management Consultants -- our career transition and organizational consulting unit -- is redefining the services that are required to compete effectively in this industry."
Net income for the year ended December 31, 2004 totaled $245.7 million or $2.59 per diluted share, up 78 percent from $137.7 million, or $1.69 per diluted share in 2003. Revenues for the year were $14.9 billion, an increase of 23 percent from the prior year. On a constant currency basis, earnings per diluted share for the year were $2.44 on a revenue increase of 14 percent.
"On a full year basis, earnings per share reached a record high of $2.59 per share for 2004," said Joerres. "Throughout the year, we made investments and took actions that position us well for the future. We are confident that our unique service mix, designed to meet customer needs throughout the employment and business cycle, will continue to move us forward in 2005.
"As we look to the first quarter, we anticipate earnings per diluted share to range from 34 to 37 cents. This includes a one-cent benefit from currency."
In conjunction with its fourth quarter earnings release, Manpower will broadcast its conference call live over the Internet on February 1 at 8:00 a.m. CST (9:00 a.m. EST). 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/ .
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 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 December 31
% Variance
Amount Constant
2004 2003 Reported Currency
(Unaudited)
Revenues from services (a) $4,072.7 $3,289.2 23.8% 16.1%
Cost of services 3,308.5 2,689.5 23.0%
Gross profit 764.2 599.7 27.4% 20.0%
Selling and administrative expenses 646.7 510.6 26.6% 19.4%
Operating profit 117.5 89.1 31.9% 23.1%
Interest and other expenses 8.9 8.6 4.0%
Earnings before income taxes 108.6 80.5 34.9%
Provision for income taxes 39.0 30.6 27.4%
Net earnings $69.6 $49.9 39.4% 31.8%
Net earnings per share - basic $0.77 $0.64 20.3%
Net earnings per share - diluted (b) $0.73 $0.61 19.7% 13.1%
Weighted average shares - basic 90.1 78.2 15.2%
Weighted average shares - diluted (b) 97.5 85.9 13.5%
(a) Revenues from services include fees received from our franchise
offices of $9.5 million and $7.7 million for the three months ended
December 31, 2004 and 2003, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$418.2 million and $339.6 million for the three months ended
December 31, 2004 and 2003, respectively.
(b) Prior year figures have been restated to reflect the impact of
applying the "if-converted" method to our convertible debentures.
Manpower Inc.
Operating Unit Results
(In millions)
Three Months Ended December 31
% Variance
Amount Constant
2004 2003 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $517.4 $497.8 3.9% 3.9%
France 1,409.9 1,233.1 14.3% 4.9%
EMEA 1,435.8 1,089.5 31.8% 21.0%
Jefferson Wells 102.9 37.5 173.9% 173.9%
Right (b) 106.9 17.8 N/A N/A
Other Operations 499.8 413.5 20.8% 17.2%
$4,072.7 $3,289.2 23.8% 16.1%
Operating Unit Profit:
United States $16.8 $9.7 73.4% 73.4%
France 55.0 63.9 -13.8% -21.0%
EMEA 41.3 17.0 141.7% 121.5%
Jefferson Wells 13.2 0.4 N/A N/A
Right (0.4) (1.4) N/A N/A
Other Operations 10.3 12.4 -16.3% -16.9%
136.2 102.0
Corporate expenses 15.4 12.9
Amortization of intangible assets 3.3 -
Operating profit 117.5 89.1 31.9% 23.1%
Interest and other expenses (c) 8.9 8.6
Earnings before income taxes $108.6 $80.5
(a) In the United States, revenues from services include fees received
from the related franchise offices of $6.7 million and $6.2 million
for the three months ended December 31, 2004 and 2003, respectively.
These fees are primarily based on revenues generated by the franchise
offices, which were $310.4 million and $286.8 million for the three
months ended December 31, 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 $11.4 $10.4
Interest income (3.2) (2.0)
Foreign exchange gains (1.5) (0.4)
Miscellaneous expenses, net 2.2 0.6
$8.9 $8.6
Manpower Inc.
Results of Operations
(In millions, except per share data)
Year Ended December 31
% Variance
Amount Constant
2004 2003 Reported Currency
(Unaudited)
Revenues from services (a) $14,930.0 $12,184.5 22.5% 14.1%
Cost of services 12,141.9 10,047.7 20.8%
Gross profit 2,788.1 2,136.8 30.5% 22.0%
Selling and administrative expenses 2,392.3 1,878.9 27.3% 19.1%
Operating profit 395.8 257.9 53.5% 43.0%
Interest and other expenses 26.3 35.8 -26.6%
Earnings before income taxes 369.5 222.1 66.3%
Provision for income taxes 123.8 84.4 46.7%
Net earnings $245.7 $137.7 78.4% 68.3%
Net earnings per share - basic $2.76 $1.77 55.9%
Net earnings per share - diluted (b) $2.59 $1.69 53.3% 45.0%
Weighted average shares - basic 88.9 77.7 14.4%
Weighted average shares - diluted (b) 96.8 85.3 13.4%
(a) Revenues from services include fees received from our franchise
offices of $34.5 million and $26.5 million for the year ended
December 31, 2004 and 2003, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$1,487.1 million and $1,214.4 million for the year ended December 31,
2004 and 2003, respectively.
(b) Prior year figures have been restated to reflect the impact of
applying the "if-converted" method to our convertible debentures.
Manpower Inc.
Operating Unit Results
(In millions)
Year Ended December 31
% Variance
Amount Constant
2004 2003 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $2,041.1 $1,945.8 4.9% 4.9%
France 5,226.7 4,638.8 12.7% 2.8%
EMEA 5,084.3 3,920.2 29.7% 18.0%
Jefferson Wells 340.6 136.4 149.6% 149.6%
Right (b) 431.1 66.9 N/A N/A
Other Operations 1,806.2 1,476.4 22.3% 16.0%
$14,930.0 $12,184.5 22.5% 14.1%
Operating Unit Profit:
United States $49.3 $33.7 46.4% 46.4%
France 178.8 184.0 -2.8% -11.0%
EMEA 115.1 51.7 122.4% 104.1%
Jefferson Wells 51.4 (9.9) N/A N/A
Right 24.5 (2.3) N/A N/A
Other Operations 46.0 40.1 14.9% 8.5%
465.1 297.3
Corporate expenses 57.0 39.4
Amortization of intangible assets 12.3 -
Operating profit 395.8 257.9 53.5% 43.0%
Interest and other expenses (c) 26.3 35.8
Earnings before income taxes $369.5 $222.1
(a) In the United States, revenues from services include fees received
from the related franchise offices of $25.0 million and $21.9
million for the year ended December 31, 2004 and 2003, respectively.
These fees are primarily based on revenues generated by the
franchise offices, which were $1,181.5 million and $1,026.2 million
for the year ended December 31, 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 $45.4 $41.4
Interest income (9.4) (8.0)
Foreign exchange gains (1.6) (1.3)
Miscellaneous (income)
expense, net (8.1) 3.7
$26.3 $35.8
Manpower Inc.
Consolidated Balance Sheets
(In millions)
December 31
2004 2003
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $531.8 $426.2
Accounts receivable, net 3,227.8 2,600.9
Prepaid expenses and other assets 138.1 100.1
Future income tax benefits 96.5 101.4
Total current assets 3,994.2 3,228.6
Other assets:
Goodwill and other intangible assets, net 1,297.0 544.3
Investments in licensees 82.7 95.7
Other assets 222.8 320.7
Total other assets 1,602.5 960.7
Property and equipment:
Land, buildings, leasehold
improvements and equipment 669.8 606.3
Less: accumulated depreciation and
amortization 446.7 419.2
Net property and equipment 223.1 187.1
Total assets $5,819.8 $4,376.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $687.1 $555.4
Employee compensation payable 156.0 105.6
Accrued liabilities 482.4 360.0
Accrued payroll taxes and insurance 569.6 476.6
Value added taxes payable 457.8 368.2
Short-term borrowings and current
maturities of long-term debt 225.7 12.1
Total current liabilities 2,578.6 1,877.9
Other liabilities:
Long-term debt 676.1 829.6
Other long-term liabilities 391.1 358.6
Total other liabilities 1,067.2 1,188.2
Shareholders' equity:
Common stock 1.0 0.9
Capital in excess of par value 2,296.4 1,732.5
Retained earnings (accumulated deficit) 51.0 (167.6)
Accumulated other comprehensive income 109.4 28.3
Treasury stock, at cost (283.8) (283.8)
Total shareholders' equity 2,174.0 1,310.3
Total liabilities and
shareholders' equity $5,819.8 $4,376.4
Manpower Inc.
Consolidated Statements of Cash Flows
(In millions)
Year Ended
December 31
2004 2003
(Unaudited)
Cash Flows from Operating Activities:
Net earnings $245.7 $137.7
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 86.5 64.4
Amortization of discount on
convertible debentures 7.8 7.6
Deferred income taxes (3.2) (13.0)
Provision for doubtful accounts 27.3 16.7
Other non-operating gains (14.2) -
Changes in operating assets and
liabilities excluding the
impact of acquisitions:
Accounts receivable (363.9) (74.3)
Other assets 59.2 (25.8)
Other liabilities 142.2 110.1
Cash provided by
operating activities 187.4 223.4
Cash Flows from Investing Activities:
Capital expenditures (67.9) (55.5)
Acquisitions of businesses, net of
cash acquired (117.3) (6.7)
Proceeds from sale of an equity interest 29.8 -
Proceeds from the sale of property
and equipment 5.6 6.0
Cash used by investing activities (149.8) (56.2)
Cash Flows from Financing Activities:
Net borrowings (repayments) of
short-term facilities and long-term debt 5.7 (84.5)
Proceeds from stock option and
purchase plans 60.0 35.6
Dividends paid (27.1) (15.6)
Cash provided (used) by
financing activities 38.6 (64.5)
Effect of exchange rate changes on cash 29.4 39.5
Change in cash and cash equivalents 105.6 142.2
Cash and cash equivalents, beginning of period 426.2 284.0
Cash and cash equivalents, end of period $531.8 $426.2
Manpower Inc.
Restated Net Earnings Per Share - Diluted
(Unaudited)
Quarter Ended Year-To-Date
As As
Reported Restated Reported Restated
2001
March $0.35 $0.35 $0.35 $0.35
June 0.45 0.45 0.80 0.80
September 0.48 0.47 1.28 1.27
December 0.34 0.33 1.62 1.59
2002
March 0.09 0.09 0.09 0.09
June 0.33 0.33 0.42 0.42
September 0.52 0.50 0.94 0.93
December 0.52 0.50 1.46 1.42
2003
March 0.19 0.19 0.19 0.19
June 0.37 0.36 0.56 0.56
September 0.56 0.53 1.12 1.09
December 0.63 0.61 1.74 1.69
2004
March 0.45 0.43 0.45 0.43
June 0.56 0.56 1.01 0.99
September 0.89 0.87 1.91 1.86
December 0.73 0.73 2.59 2.59
During September 2004, the Emerging Issues Task Force ("EITF") issued
Issue No. 04-8, "The Effect of Contingently Convertible Debt on Diluted
Earnings Per Share" ("EITF 04-8"), which requires the effect of
contingently convertible debt securities with a market price trigger to
be included in the calculation of diluted earnings per share, using the
"if-converted" method, regardless of whether the market price trigger has
been met. EITF 04-8 also requires restatement of previously reported
earnings. Our convertible debentures, issued in August 2001, have such a
feature, and therefore we have restated Net Earnings Per Share - Diluted
for all periods since the issuance.
SOURCE: Manpower Inc.
CONTACT: Mike Van Handel, Chief Financial Officer of Manpower Inc.,
+1-414-906-6305
Web site: http://www.manpower.com/
