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Manpower Reports 2nd Quarter and First Half 2006 Results

PRNewswire-FirstCall
MILWAUKEE
Jul 19, 2006

Manpower Inc. (NYSE: MAN) today reported that earnings per diluted share for the three months ended June 30, 2006 increased 30 percent to 91 cents from 70 cents in the prior year period. Net income in the quarter increased to $80.4 million from $62.5 million a year earlier. Revenues for the second quarter totaled $4.4 billion, an increase of 10 percent from the year-earlier period. Results for the second quarter were not significantly impacted by changes in foreign currency exchange rates.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060221/CGTU012LOGO )

Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "We had very strong results across nearly all business units in the second quarter. The relentless execution of our key strategies of elevating and broadening our relationships with our clients, and improving our efficiency through speed and quality is producing superior results.

"Our performance underscores the momentum that we have established over the past eighteen months. As we move into the second half of 2006, our major geographies and business units continue to be well-positioned for a strong year.

"We are anticipating the third quarter of 2006 diluted earnings per share to be in the range of $1.00 to $1.04, which includes an estimated favorable currency impact of 2 cents," Joerres stated.

Earnings per diluted share for the six months ended June 30, 2006 were $1.50, an increase of 46 percent from $1.03 per diluted share in 2005. Net income was $133.0 million compared to $94.7 million the prior year. Revenues for the six-month period were $8.4 billion, an increase of 7 percent from the prior year or 11 percent in constant currency. Foreign currency exchange rates had a negative impact of 5 cents for the six-month period.

Included in the 2006 six-month period was a 27 cents per diluted share gain on the sale of a payroll processing business in Sweden, and a 16 cents per diluted share charge related to reorganization and a global cost reduction initiative.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 19, 2006 at 7:30 a.m. CDT (8:30 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; creating and delivering services that enable its clients to win in the changing world of work. The $16 billion company offers employers a range of services for the entire employment and business cycle including permanent, temporary and contract recruitment; employee assessment and selection; training; outplacement; outsourcing and consulting. Manpower's worldwide network of 4,400 offices in 72 countries and territories enables the company to meet the needs of its 400,000 clients 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 across their total workforce, enabling clients to concentrate on their core business activities. Manpower Inc. operates under five brands: Manpower, Manpower Professional, Elan, Jefferson Wells and Right Management. 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 'Risk Factors' in its Annual Report on Form 10-K for the year ended December 31, 2005, 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
                                    2006      2005     Reported  Currency
                                                  (Unaudited)

  Revenues from services (a)      $4,440.0  $4,053.7      9.5%     10.0%

  Cost of services                 3,623.6   3,314.5      9.3%

    Gross profit                     816.4     739.2     10.4%     10.9%

  Selling and administrative
   expenses                          677.3     629.5      7.6%      8.1%

    Operating profit                 139.1     109.7     26.9%     26.8%

  Interest and other expenses         12.5      11.3     11.2%

    Earnings before income taxes     126.6      98.4     28.7%

  Provision for income taxes          46.2      35.9     28.7%

    Net earnings                     $80.4     $62.5     28.6%     28.2%



  Net earnings per share - basic     $0.92     $0.71     29.6%

  Net earnings per share - diluted   $0.91     $0.70     30.0%     28.6%


  Weighted average shares - basic     87.3      88.6     -1.5%

  Weighted average shares - diluted   88.7      89.5     -0.9%


  (a)  Revenues from services include fees received from our franchise
       offices of $8.8 million for the three months ended June 30, 2006 and
       2005.  These fees are primarily based on revenues generated by
       the franchise offices, which were $388.8 million and $375.7
       million for the three months ended June 30, 2006 and 2005,
       respectively.


                               Manpower Inc.
                          Operating Unit Results
                               (In millions)

                                           Three Months Ended June 30
                                                            % Variance
                                                         Amount   Constant
                                        2006    2005    Reported  Currency
                                                  (Unaudited)
  Revenues from Services: (a)
    United States (b)                  $534.6   $506.7     5.5%     5.5%
    France                            1,535.6  1,397.0     9.9%     9.8%
    EMEA                              1,590.1  1,430.4    11.2%    11.6%
    Jefferson Wells                      98.8     93.5     5.7%     5.7%
    Right Management                    103.9    108.5    -4.2%    -4.1%
    Other Operations                    577.0    517.6    11.4%    14.2%
                                     $4,440.0 $4,053.7     9.5%    10.0%

  Operating Unit Profit: (a)
    United States                       $22.5    $18.0    25.2%    25.2%
    France                               49.7     42.0    18.3%    17.7%
    EMEA                                 51.7     37.9    36.3%    35.4%
    Jefferson Wells                      10.0      9.3     7.7%     7.7%
    Right Management                     11.1      9.3    19.0%    17.6%
    Other Operations                     14.8     13.2    13.0%    17.6%
                                        159.8    129.7
  Corporate expenses                     17.4     16.7
  Amortization of intangible assets       3.3      3.3
      Operating profit                  139.1    109.7    26.9%    26.8%
  Interest and other expenses (c)        12.5     11.3
      Earnings before income taxes     $126.6    $98.4


  (a) Certain Eastern European countries previously reported in France are
      now reported in EMEA due to a change in management structure.  All
      previously reported results for France and EMEA have been restated to
      conform to the current presentation.

  (b) In the United States, revenues from services include fees received
      from the related franchise offices of $6.0 million and $6.3 million
      for the three months ended June 30, 2006 and 2005, respectively.
      These fees are primarily based on revenues generated by the franchise
      offices, which were $291.9 million and $296.8 million for the three
      months ended June 30, 2006 and 2005, respectively.

  (c) The components of interest and other expenses were:

          Interest expense                 $13.1     $10.7
          Interest income                   (3.8)     (2.1)
          Foreign exchange losses
           (gains)                           1.3      (0.6)
          Miscellaneous expenses, net        1.9       3.3
                                           $12.5     $11.3


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

                                         Six Months Ended June 30
                                                          % Variance
                                                         Amount  Constant
                                      2006        2005  Reported Currency
                                                  (Unaudited)
  Revenues from services (a)        $8,369.9   $7,812.4    7.1%    10.7%

  Cost of services                   6,836.1    6,391.2    7.0%

    Gross profit                     1,533.8    1,421.2    7.9%    11.3%

  Selling and administrative
   expenses                          1,335.0    1,249.0    6.9%    10.2%

    Operating profit                   198.8      172.2   15.5%    18.9%

  Interest and other (income)
   expenses                             (3.8)      23.0      N/A

    Earnings before income taxes       202.6      149.2   35.8%

  Provision for income taxes            69.6       54.5   27.8%

    Net earnings                      $133.0      $94.7   40.4%    45.3%



  Net earnings per share - basic       $1.52      $1.06   43.4%

  Net earnings per share - diluted     $1.50      $1.03   45.6%    50.5%


  Weighted average shares - basic       87.3       89.2   -2.1%

  Weighted average shares - diluted     88.8       93.2   -4.8%


  (a)  Revenues from services include fees received from our franchise
       offices of $16.8 million and $17.1 million for the six months ended
       June 30, 2006 and 2005, respectively.  These fees are primarily based
       on revenues generated by the franchise offices, which were $751.6
       million and $725.5 million for the six months ended June 30, 2006 and
       2005, respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                              Six Months Ended June 30
                                                           % Variance
                                                         Amount    Constant
                                       2006       2005   Reported  Currency
                                                    (Unaudited)
  Revenues from Services: (a)
    United States (b)                $1,044.9     $982.6    6.3%       6.3%
    France                            2,776.1    2,635.0    5.4%       9.5%
    EMEA                              3,023.0    2,773.0    9.0%      13.7%
    Jefferson Wells                     194.3      186.2    4.3%       4.3%
    Right Management                    199.9      212.5   -5.9%      -4.2%
    Other Operations                  1,131.7    1,023.1   10.6%      14.1%
                                     $8,369.9   $7,812.4    7.1%      10.7%

  Operating Unit Profit: (a)
    United States                       $32.0      $22.9   39.8%      39.8%
    France                               80.1       70.4   13.8%      17.3%
    EMEA                                 74.1       52.0   42.3%      45.9%
    Jefferson Wells                      15.7       17.4   -9.6%      -9.6%
    Right Management                     15.4       19.1  -19.5%     -20.7%
    Other Operations                     32.7       25.7   27.7%      34.4%
                                        250.0      207.5
  Corporate expenses                     44.7       28.8
  Amortization of intangible assets       6.5        6.5
      Operating profit                  198.8      172.2   15.5%      18.9%
  Interest and other (income) expenses
   (c)                                   (3.8)      23.0
      Earnings before income taxes     $202.6     $149.2


  (a)  Certain Eastern European countries previously reported in France are
       now reported in EMEA due to a change in management structure.  All
       previously reported results for France and EMEA have been restated to
       conform to the current presentation.

  (b)  In the United States, revenues from services include fees received
       from the related franchise offices of $11.3 million and $11.7 million
       for the six months ended June 30, 2006 and 2005, respectively.  These
       fees are primarily based on revenues generated by the franchise
       offices, which were $574.2 million and $574.4 million for the six
       months ended June 30, 2006 and 2005, respectively.

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

          Interest expense                  $24.7     $22.3
          Interest income                    (7.1)     (4.4)
          Foreign exchange losses             2.2       0.2
          Miscellaneous (income)
           expense, net                     (23.6)      4.9
                                            $(3.8)    $23.0



                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                  Jun. 30           Dec. 31
                                                   2006              2005
                                                        (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $768.1            $454.9
    Accounts receivable, net                     3,610.8           3,208.2
    Prepaid expenses and other assets              109.6             107.5
    Future income tax benefits                      94.8              71.1
        Total current assets                     4,583.3           3,841.7

  Other assets:
    Goodwill and other intangible assets, net    1,281.1           1,256.5
    Other assets                                   334.2             273.8
        Total other assets                       1,615.3           1,530.3

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    687.0             642.4
    Less:  accumulated depreciation and
     amortization                                  485.4             446.0
      Net property and equipment                   201.6             196.4
                                                $6,400.2          $5,568.4

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $898.0            $685.4
    Employee compensation payable                  151.7             150.6
    Accrued liabilities                            559.0             435.4
    Accrued payroll taxes and insurance            603.8             607.2
    Value added taxes payable                      480.6             441.9
    Short-term borrowings and current
      maturities of long-term debt                 281.3             260.0
        Total current liabilities                2,974.4           2,580.5

  Other liabilities:
    Long-term debt                                 766.3             475.0
    Other long-term liabilities                    390.6             366.3
        Total other liabilities                  1,156.9             841.3

  Shareholders' equity:
    Common stock                                     1.0               1.0
    Capital in excess of par value               2,389.5           2,346.7
    Retained earnings                              379.2             269.9
    Accumulated other comprehensive
     income (loss)                                  68.8             (11.0)
    Treasury stock, at cost                       (569.6)           (460.0)
        Total shareholders' equity               2,268.9           2,146.6
          Total liabilities and
           shareholders' equity                 $6,400.2          $5,568.4



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

                                                      Six Months Ended
                                                          June 30
                                                   2006              2005
                                                        (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                  $133.0             $94.7
    Adjustments to reconcile net earnings to net
      cash provided by operating activities:
        Depreciation and amortization               43.8              45.5
        Amortization of discount on
         convertible debentures                       -                1.9
        Deferred income taxes                      (25.3)             (6.8)
        Provision for doubtful accounts             11.8               8.2
        Stock based compensation                    10.2               0.8
        Excess tax benefit on exercise
         of stock options                           (1.6)               -
        Other non-operating gains                  (29.3)               -
        Changes in operating assets and
         liabilities excluding
         the impact of acquisitions:
            Accounts receivable                   (216.4)           (140.9)
            Other assets                            18.1             (23.9)
            Other liabilities                      191.3             119.7
              Cash provided by operating
               activities                          135.6              99.2

  Cash Flows from Investing Activities:
    Capital expenditures                           (34.8)            (36.1)
    Acquisitions of businesses, net of
     cash acquired                                  (7.2)             (3.1)
    Proceeds from sale of business                  29.6                -
    Proceeds from sale of an equity interest         8.8                -
    Proceeds from the sale of property
     and equipment                                   3.1               3.1
              Cash used by investing activities     (0.5)            (36.1)

  Cash Flows from Financing Activities:
    Net borrowings of short-term
     facilities and long-term debt                 250.8             174.2
    Cash paid to settle convertible debentures        -             (206.6)
    Proceeds from settlement of swap agreements       -               50.7
    Proceeds from stock option and
     purchase plans                                 40.6               8.4
    Excess tax benefit on exercise of
     stock options                                   1.6                -
    Repurchases of common stock                   (119.1)           (203.5)
    Dividends paid                                 (23.7)            (17.6)
              Cash provided (used) by
               financing activities                150.2            (194.4)

  Effect of exchange rate changes on cash           27.9             (37.2)
  Change in cash and cash equivalents              313.2            (168.5)

  Cash and cash equivalents, beginning
   of period                                       454.9             531.8
  Cash and cash equivalents, end of period        $768.1            $363.3
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20060221/CGTU012LOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com

SOURCE: Manpower Inc.

CONTACT: Mike Van Handel, Manpower Inc., +1-414-906-6305, or
michael.vanhandel@manpower.com

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


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