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.
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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
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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/
