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Manpower Reports 2nd Quarter and First Half 2005 Results

PRNewswire-FirstCall
MILWAUKEE
Jul 19, 2005

Manpower Inc. (NYSE: MAN) today reported that earnings per diluted share for the three months ended June 30, 2005 increased 25% to 70 cents from 56 cents in the prior year period. Net income in the quarter increased to $62.5 million from $53.1 million a year earlier. Revenues for the second quarter totaled $4.1 billion, an increase of 12 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 68 cents on an 8 percent improvement in revenues.

Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "Manpower's team across the world aggressively executed our initiatives yielding strong results. Our focus on growth in specialty areas is enabling us to expand our offering and enhance profitability. Jefferson Wells, our finance and accounting group, continues to show solid growth in both Sarbanes-Oxley and non-Sarbanes work, which is a balance that we have been striving toward.

"We are experiencing steady trends in the commercial staffing area throughout most of the world. These trends, and the ability of our team to continue to operate more efficiently, add to our confidence for the balance of the year.

"We are anticipating the third quarter of 2005 diluted earnings per share to be in the range of 81 to 85 cents. Based upon current exchange rates, any currency impact is not expected to be significant," Joerres stated.

Earnings per diluted share for the six months ended June 30, 2005 were $1.03, an increase of 4% from 99 cents per diluted share in 2004. Net income was $94.7 million compared to $92.7 million the prior year. Revenues for the six-month period were $7.8 billion, an increase of 12 percent from the prior year. On a constant currency basis, earnings per diluted share for the six- month period were $1.00 on a 9 percent improvement in revenues.

Included in the prior year six-month period was a first quarter non- operating gain of $14.2 million ($10.2 million net of income taxes), or 11 cents per diluted share.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 19, 2005 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; organizational consulting; and professional financial services. Manpower's worldwide network of 4,300 offices in 68 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, 2004, 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
                                          2005      2004  Reported  Currency
                                                    (Unaudited)

  Revenues from services (a)           $4,053.7   $3,622.4   11.9%    8.2%

  Cost of services                      3,314.5    2,943.1   12.6%

    Gross profit                          739.2      679.3    8.8%    5.4%

  Selling and administrative expenses     629.5      584.1    7.8%    4.4%

    Operating profit                      109.7       95.2   15.2%   11.2%

  Interest and other expense               11.3       12.3   -8.1%

    Earnings before income taxes           98.4       82.9   18.7%

  Provision for income taxes               35.9       29.8   20.3%

    Net earnings                          $62.5      $53.1   17.7%   14.2%



  Net earnings per share - basic          $0.71      $0.59   20.3%

  Net earnings per share - diluted (b)    $0.70      $0.56   25.0%   21.4%


  Weighted average shares - basic          88.6       89.6   -1.1%

  Weighted average shares - diluted (b)    89.5       97.4   -8.1%


  (a) Revenues from services include fees received from our franchise
      offices of $8.8 million and $7.9 million for the three months ended
      June 30, 2005 and 2004, respectively. These fees are primarily based
      on revenues generated by the franchise offices, which were $375.7
      million and $350.4 million for the three months ended June 30, 2005
      and 2004, 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 June 30
                                                           % Variance
                                                           Amount   Constant
                                            2005    2004  Reported  Currency
                                                    (Unaudited)
  Revenues from Services:
    United States (a)                     $506.7    $517.3    -2.1%   -2.1%
    France                               1,408.3   1,278.3    10.2%    5.6%
    EMEA                                 1,419.1   1,202.2    18.0%   13.6%
    Jefferson Wells                         93.5      76.6    22.0%   22.0%
    Right                                  108.5     119.9    -9.6%  -12.0%
    Other Operations                       517.6     428.1    20.9%   15.9%
                                        $4,053.7  $3,622.4    11.9%    8.2%

  Operating Unit Profit:
    United States                          $18.0     $14.1    27.3%   27.3%
    France                                  41.5      39.4     5.1%    1.1%
    EMEA                                    38.4      26.2    46.8%   41.6%
    Jefferson Wells                          9.3      11.1   -16.0%  -16.0%
    Right                                    9.3      12.6   -25.8%  -27.9%
    Other Operations                        13.2       9.6    36.4%   30.5%
                                           129.7     113.0
  Corporate expenses                        16.7      14.4
  Amortization of intangible assets          3.3       3.4
      Operating profit                     109.7      95.2    15.2%   11.2%
  Interest and other expense (b)            11.3      12.3
      Earnings before income taxes         $98.4     $82.9

  (a) In the United States, revenues from services include fees received
      from the related franchise offices of $6.3 million and $5.8 million
      for the three months ended June 30, 2005 and 2004, respectively.
      These fees are primarily based on revenues generated by the franchise
      offices, which were $296.8 million and $289.7 million for the three
      months ended June 30, 2005 and 2004, respectively.

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

          Interest expense                 $10.7     $12.0
          Interest income                   (2.1)     (1.6)
          Foreign exchange (gains)
           losses                           (0.6)      0.2
          Miscellaneous expenses, net        3.3       1.7
                                           $11.3     $12.3



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

                                              Six Months Ended June 30
                                                             % Variance
                                                           Amount   Constant
                                            2005    2004  Reported  Currency
                                                      (Unaudited)

  Revenues from services (a)            $7,812.4  $6,956.5   12.3%    8.5%

  Cost of services                       6,391.2   5,660.7   12.9%

    Gross profit                         1,421.2   1,295.8    9.7%    6.1%

  Selling and administrative expenses    1,249.0   1,144.4    9.1%    5.7%

    Operating profit                       172.2     151.4   13.7%    9.5%

  Interest and other expenses               23.0       8.3  177.4%

    Earnings before income taxes           149.2     143.1    4.2%

  Provision for income taxes                54.5      50.4    7.9%

    Net earnings                           $94.7     $92.7    2.2%   -1.2%



  Net earnings per share - basic           $1.06     $1.06      -

  Net earnings per share - diluted (b)     $1.03     $0.99    4.0%    1.0%


  Weighted average shares - basic           89.2      87.7    1.7%

  Weighted average shares - diluted (b)     93.2      96.0   -2.9%


  (a) Revenues from services include fees received from our franchise
      offices of $17.1 million and $16.1 million for the six months ended
      June 30, 2005 and 2004, respectively. These fees are primarily based
      on revenues generated by the franchise offices, which were $725.5
      million and $671.9 million for the six months ended June 30, 2005 and
      2004, 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)


                                              Six Months Ended June 30
                                                             % Variance
                                                           Amount   Constant
                                            2005    2004  Reported  Currency
                                                    (Unaudited)
  Revenues from Services:
    United States (a)                     $982.6    $991.9   -0.9%   -0.9%
    France                               2,655.8   2,414.8   10.0%    5.2%
    EMEA                                 2,752.2   2,343.1   17.5%   12.7%
    Jefferson Wells                        186.2     127.1   46.5%   46.5%
    Right                                  212.5     221.7   -4.2%   -6.6%
    Other Operations                     1,023.1     857.9   19.3%   15.4%
                                        $7,812.4  $6,956.5   12.3%    8.5%

  Operating Unit Profit:
    United States                          $22.9     $16.9   35.2%   35.2%
    France                                  69.0      68.2    1.2%   -3.3%
    EMEA                                    53.4      39.9   34.0%   28.8%
    Jefferson Wells                         17.4      13.1   32.7%   32.7%
    Right                                   19.1      21.7  -11.7%  -14.0%
    Other Operations                        25.7      24.9    2.8%   -0.7%
                                           207.5     184.7
  Corporate expenses                        28.8      27.6
  Amortization of intangible assets          6.5       5.7
      Operating profit                     172.2     151.4   13.7%    9.5%
  Interest and other expenses (b)           23.0       8.3
      Earnings before income taxes        $149.2    $143.1



  (a) In the United States, revenues from services include fees received
      from the related franchise offices of $11.7 million and $12.0 million
      for the six months ended June 30, 2005 and 2004, respectively. These
      fees are primarily based on revenues generated by the franchise
      offices, which were $574.4 million and $552.7 million for the six
      months ended June 30, 2005 and 2004, respectively.

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

          Interest expense                  $22.3     $23.1
          Interest income                    (4.4)     (4.0)
          Foreign exchange losses             0.2       0.3
          Miscellaneous expense
           (income), net                      4.9     (11.1)
                                            $23.0      $8.3



                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                 Jun. 30           Dec. 31
                                                   2005              2004
                                                        (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $363.3            $531.8
    Accounts receivable, net                     3,084.7           3,227.8
    Prepaid expenses and other assets               92.7             161.4
    Future income tax benefits                     107.7              96.5
        Total current assets                     3,648.4           4,017.5

  Other assets:
    Goodwill and other intangible
     assets, net                                 1,268.2           1,297.0
    Other assets                                   307.0             305.5
      Total other assets                         1,575.2           1,602.5

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    641.5             669.8
    Less: accumulated depreciation and
     amortization                                  441.3             446.7
      Net property and equipment                   200.2             223.1
        Total assets                            $5,423.8          $5,843.1

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $710.8            $687.1
    Employee compensation payable                  135.0             156.0
    Accrued liabilities                            470.3             505.7
    Accrued payroll taxes and insurance            519.2             569.6
    Value added taxes payable                      413.6             457.8
    Short-term borrowings and current
     maturities of long-term debt                   27.0             225.7
      Total current liabilities                  2,275.9           2,601.9

  Other liabilities:
    Long-term debt                                 727.1             676.1
    Other long-term liabilities                    381.4             391.1
      Total other liabilities                    1,108.5           1,067.2

  Shareholders' equity:
    Common stock                                     1.0               1.0
    Capital in excess of par value               2,324.9           2,296.4
    Retained earnings                              128.0              51.0
    Accumulated other comprehensive
     income                                         31.4             109.4
    Treasury stock, at cost                       (445.9)           (283.8)
      Total shareholders' equity                 2,039.4           2,174.0
       Total liabilities and
        shareholders' equity                    $5,423.8          $5,843.1



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

                                                       Six Months Ended
                                                            June 30
                                                    2005              2004
                                                         (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                   $94.7             $92.7
    Adjustments to reconcile net
     earnings to net
     cash provided by operating
     activities:
      Depreciation and amortization                 45.5              41.4
      Amortization of discount on
       convertible debentures                        1.9               3.9
      Deferred income taxes                         (6.8)             (8.9)
      Provision for doubtful accounts                8.2              12.2
      Other non-operating gains                        -             (14.2)
      Changes in operating assets and
       liabilities excluding
       the impact of acquisitions:
        Accounts receivable                       (140.9)           (245.1)
        Other assets                               (23.9)             13.3
        Other liabilities                          119.7             172.3
        Cash provided by
         operating activities                       98.4              67.6

  Cash Flows from Investing Activities:
    Capital expenditures                           (36.1)            (27.0)
    Acquisitions of businesses, net of
     cash acquired                                  (3.1)           (103.6)
    Proceeds from sale of an equity
     interest                                         -               29.8
    Proceeds from the sale of property
     and equipment                                   3.1               3.8
      Cash used by investing activities            (36.1)            (97.0)

  Cash Flows from Financing Activities:
    Net borrowings of short-term
     facilities and long-term debt                 174.2               8.7
    Cash paid to settle convertible
     debentures                                   (206.6)               -
    Proceeds from settlement of swap
     agreements                                     50.7                -
    Proceeds from stock option and
     purchase plans                                  9.2              52.8
    Repurchases of common stock                   (203.5)               -
    Dividends paid                                 (17.6)             (9.1)
      Cash (used) provided by
       financing activities                       (193.6)             52.4

  Effect of exchange rate changes on
   cash                                            (37.2)             (8.8)
  Change in cash and cash equivalents             (168.5)             14.2

  Cash and cash equivalents, beginning
   of period                                       531.8             426.2
  Cash and cash equivalents, end of
   period                                         $363.3            $440.4

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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