Manpower Inc. (NYSE: MAN) today reported that net earnings per diluted share for the three months ended December 31, 2006 increased 88 percent to $1.90 from $1.01 in the prior year period. Net earnings in the quarter increased to $164.4 million from $89.1 million a year earlier. Revenues for the fourth quarter totaled $4.7 billion, an increase of 16 percent from the year-earlier period, or an increase of 9 percent in constant currency.
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Included in the fourth quarter results is net income from discontinued operations, primarily related to the sale of our Nordic facility management services, of $64.8 million or 75 cents per diluted share. Net earnings per diluted share from continuing operations in the fourth quarter were $1.15, an increase of 15 percent. Included in net earnings from continuing operations are severance costs related to Right Management of $6.9 million ($5.4 million net of income taxes or 6 cents per diluted share). Additionally, results from continuing operations in the fourth quarter were favorably impacted by 6 cents as foreign currencies were relatively stronger compared to the prior year period.
Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "Manpower performed extremely well in the fourth quarter and for the full year. 2006 was a pivotal year for us as we executed very well to affect the present, and laid the groundwork for outstanding performance in the future. Our continued growth in Europe, emerging markets and our specialty service lines will fuel solid growth into 2007.
"We are anticipating diluted net earnings per share for the first quarter of 2007 to be in the range of 57 to 61 cents. This includes an estimated favorable currency impact of 4 cents per diluted share."
Net earnings per diluted share for the year ended December 31, 2006 were $4.54, an increase of 58 percent from $2.87 per diluted share in 2005. Net earnings were $398.0 million compared to $260.1 million in the prior year. Revenues for the year were $17.6 billion, an increase of 11 percent from the prior year, or an increase of 10 percent in constant currency.
Included in the full year 2006 results is net income from discontinued operations, primarily related to the sale of our Swedish payrolling business in the first quarter and our sale of the Nordic facility management services in the fourth quarter, of $92.3 million or $1.06 per diluted share. Net earnings per diluted share from continuing operations for 2006 were $3.48, an increase of 23 percent. Included in net earnings from continuing operations are charges related to reorganization and a global cost reduction initiative totaling $26.8 million ($18.8 million net of income taxes or 22 cents per diluted share). Additionally, results from continuing operations were favorably impacted by 6 cents due to changes in foreign currencies compared to the prior year.
In conjunction with its fourth quarter earnings release, Manpower will broadcast its conference call live over the Internet on January 30, 2007 at 7:30 a.m. CST (8:30 a.m. EST). 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 $18 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 73 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 December 31
% Variance
Amount Constant
2006 2005 Reported Currency
(Unaudited)
Revenues from services (a) $4,710.7 $4,068.3 15.8% 9.1%
Cost of services (b) 3,844.9 3,321.9 15.7%
Gross profit 865.8 746.4 16.0% 9.6%
Selling and administrative
expenses (b) 696.0 615.6 13.0% 6.9%
Operating profit 169.8 130.8 29.8% 22.0%
Interest and other expenses 14.1 7.0 N/A
Earnings before income taxes and
discontinued operations 155.7 123.8 25.7% 19.3%
Provision for income taxes 56.1 35.4 58.6%
Net earnings from continuing
operations 99.6 88.4 12.6% 6.8%
Income from discontinued operations,
net of income taxes 64.8 0.7 N/A
Net earnings $164.4 $89.1 84.6% 69.4%
Net earnings per share - basic:
Continuing operations $1.17 $1.01 15.8%
Discontinued operations 0.77 0.01 N/A
Total $1.94 $1.02 90.2%
Net earnings per share - diluted:
Continuing operations $1.15 $1.00 15.0% 9.0%
Discontinued operations 0.75 0.01 N/A
Total $1.90 $1.01 88.1% 73.3%
Weighted average shares - basic 84.8 87.2 -2.8%
Weighted average shares - diluted 86.5 88.5 -2.3%
(a) Revenues from services include fees received from our franchise
offices of $9.3 million and $9.1 million for the three months ended
December 31, 2006 and 2005, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$353.2 million and $388.6 million for the three months
ended December 31, 2006 and 2005, respectively.
(b) Our French business tax and profit sharing expenses, totaling $35.0
million and $19.7 million for the three months ended December 31,
2006 and 2005 respectively, previously reported as Selling and
administrative expenses, are now reported in Cost of services as we
believe this presentation is more appropriate given the nature of
these expenses. All previously reported results have been revised to
conform to the current year presentation.
Manpower Inc.
Operating Unit Results
(In millions)
Three Months Ended December 31
% Variance
Amount Constant
2006 2005 Reported Currency
(Unaudited)
Revenues from Services: (a)
United States (b) $527.9 $534.2 -1.2% -1.2%
France 1,589.0 1,361.5 16.7% 7.7%
EMEA 1,792.2 1,444.7 24.0% 14.2%
Jefferson Wells 84.8 96.1 -11.9% -11.9%
Right Management 98.9 96.6 2.4% -1.8%
Other Operations 617.9 535.2 15.5% 14.7%
$4,710.7 $4,068.3 15.8% 9.1%
Operating Unit Profit: (a)
United States $26.8 $23.2 15.2% 15.2%
France 61.2 47.7 28.3% 18.4%
EMEA 80.6 51.9 55.4% 43.8%
Jefferson Wells 6.2 4.4 41.4% 41.4%
Right Management 0.4 3.6 -87.5% -74.1%
Other Operations 21.1 19.2 9.9% 10.3%
196.3 150.0
Corporate expenses 23.2 15.9
Amortization of intangible assets 3.3 3.3
Operating profit 169.8 130.8 29.8% 22.0%
Interest and other expenses (c) 14.1 7.0
Earnings before income taxes
and discontinued operations $155.7 $123.8
(a) Certain Eastern European countries previously reported in France, and
our Russian operations previously reported in Other Operations, are
now reported in EMEA due to a change in management structure. All
previously reported results for France, EMEA, and Other Operations
have been revised to conform to the current presentation. The impact
of these revisions is not significant.
(b) In the United States, revenues from services include fees received
from the related franchise offices of $6.5 million for the three
months ended December 31, 2006 and 2005. These fees are primarily
based on revenues generated by the franchise offices, which were
$286.0 million and $311.8 million for the three months ended December
31, 2006 and 2005, respectively.
(c) The components of interest and other expenses were:
Interest expense $15.0 $12.0
Interest income (6.8) (3.4)
Foreign exchange losses 0.7 -
Miscellaneous expense
(income), net 5.2 (1.6)
$14.1 $7.0
Manpower Inc.
Results of Operations
(In millions, except per share data)
Year Ended December 31
% Variance
Amount Constant
2006 2005 Reported Currency
(Unaudited)
Revenues from services (a) $17,562.5 $15,845.4 10.8% 10.0%
Cost of services (b) 14,416.5 13,013.6 10.8%
Gross profit 3,146.0 2,831.8 11.1% 10.3%
Selling and administrative
expenses (b) 2,613.9 2,403.0 8.8% 8.2%
Operating profit 532.1 428.8 24.1% 21.9%
Interest and other expenses 50.2 41.8 20.2%
Earnings before income taxes
and discontinued operations 481.9 387.0 24.5% 22.1%
Provision for income taxes 176.2 131.9 33.6%
Net earnings from continuing
operations 305.7 255.1 19.8% 17.5%
Income from discontinued operations,
net of income taxes 92.3 5.0 N/A
Net earnings $398.0 260.1 53.0% 48.2%
Net earnings per share - basic:
Continuing operations $3.55 $2.89 22.8%
Discontinued operations 1.07 0.06 N/A
Total $4.62 $2.95 56.6%
Net earnings per share - diluted:
Continuing operations $3.48 $2.81 23.8% 21.7%
Discontinued operations 1.06 0.06 N/A
Total $4.54 $2.87 58.2% 53.0%
Weighted average shares - basic 86.2 88.1 -2.2%
Weighted average shares - diluted 87.7 91.1 -3.7%
(a) Revenues from services include fees received from our franchise
offices of $35.7 million and $35.8 million for the year ended
December 31, 2006 and 2005, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$1,497.0 million and $1,510.7 million for the year ended December 31,
2006 and 2005, respectively.
(b) Our French business tax and profit sharing expenses, totaling $117.4
million and $94.9 million for the year ended December 31, 2006 and
2005 respectively, previously reported as Selling and administrative
expenses, are now reported in Cost of services, as we believe this
presentation is more appropriate given the nature of these expenses.
All previously reported results have been revised to conform to the
current year presentation.
Manpower Inc.
Operating Unit Results
(In millions)
Year Ended December 31
% Variance
Amount Constant
2006 2005 Reported Currency
(Unaudited)
Revenues from Services: (a)
United States (b) $2,114.9 $2,048.3 3.2% 3.2%
France 6,019.1 5,475.8 9.9% 8.4%
EMEA 6,363.3 5,471.2 16.3% 14.7%
Jefferson Wells 373.0 386.2 -3.4% -3.4%
Right Management 387.3 401.8 -3.6% -4.2%
Other Operations 2,304.9 2,062.1 11.8% 13.8%
$17,562.5 $15,845.4 10.8% 10.0%
Operating Unit Profit: (a)
United States $87.4 $68.7 27.2% 27.2%
France 203.3 168.7 20.5% 17.6%
EMEA 220.2 144.1 52.9% 48.1%
Jefferson Wells 31.9 33.3 -4.2% -4.2%
Right Management 18.3 25.7 -28.8% -28.2%
Other Operations 69.9 60.4 16.0% 19.6%
631.0 500.9
Corporate expenses 85.8 59.0
Amortization of intangible assets 13.1 13.1
Operating profit 532.1 428.8 24.1% 21.9%
Interest and other expenses (c) 50.2 41.8
Earnings before income taxes and
discontinued operations $481.9 $387.0
(a) Certain Eastern European countries previously reported in France, and
our Russian operations previously reported in Other Operations, are
now reported in EMEA due to a change in management structure. All
previously reported results for France, EMEA, and Other Operations
have been revised to conform to the current presentation. The impact
of these revisions is not significant.
(b) In the United States, revenues from services include fees received
from the related franchise offices of $24.4 million and $24.9 million
for the year ended December 31, 2006 and 2005, respectively. These
fees are primarily based on revenues generated by the franchise
offices, which were $1,146.1 million and $1,196.9 million for the
year ended December 31, 2006 and 2005, respectively.
(c) The components of interest and other expenses were:
Interest expense $54.1 $46.7
Interest income (18.3) (9.8)
Foreign exchange losses 3.2 -
Miscellaneous expense, net 11.2 4.9
$50.2 $41.8
Manpower Inc.
Consolidated Balance Sheets
(In millions)
Dec. 31 Dec. 31
2006 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $687.9 $454.9
Accounts receivable, net 3,837.2 3,208.2
Prepaid expenses and other assets 90.5 107.5
Future income tax benefits 66.4 71.1
Total current assets 4,682.0 3,841.7
Other assets:
Goodwill and other intangible
assets, net 1,293.6 1,256.5
Other assets 336.4 273.8
Total other assets 1,630.0 1,530.3
Property and equipment:
Land, buildings, leasehold
improvements and equipment 693.2 642.4
Less: accumulated depreciation and
amortization 491.1 446.0
Net property and equipment 202.1 196.4
$6,514.1 $5,568.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $889.9 $685.4
Employee compensation payable 180.7 150.6
Accrued liabilities 562.1 435.4
Accrued payroll taxes and insurance 699.9 607.2
Value added taxes payable 517.0 441.9
Short-term borrowings and current
maturities of long-term debt 32.0 260.0
Total current liabilities 2,881.6 2,580.5
Other liabilities:
Long-term debt 791.2 475.0
Other long-term liabilities 367.1 366.3
Total other liabilities 1,158.3 841.3
Shareholders' equity:
Common stock 1.0 1.0
Capital in excess of par value 2,420.7 2,346.7
Retained earnings 617.0 269.9
Accumulated other comprehensive
income (loss) 120.6 (11.0)
Treasury stock, at cost (685.1) (460.0)
Total shareholders' equity 2,474.2 2,146.6
Total liabilities and
shareholders' equity $6,514.1 $5,568.4
Manpower Inc.
Consolidated Statements of Cash Flows
(In millions)
Year Ended
Dec. 31
2006 2005
(Unaudited)
Cash Flows from Operating Activities:
Net earnings $398.0 $260.1
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Gain on sale of businesses (121.8) (2.6)
Depreciation and amortization 88.8 92.9
Amortization of discount on
convertible debentures - 1.9
Deferred income taxes (37.3) 49.1
Provision for doubtful accounts 27.4 22.9
Stock based compensation 22.5 1.7
Excess tax benefit on exercise
of stock options (8.2) -
Changes in operating assets and
liabilities excluding
the impact of acquisitions:
Accounts receivable (381.0) (350.4)
Other assets 35.1 (46.1)
Other liabilities 335.6 239.3
Cash provided by
operating activities 359.1 268.8
Cash Flows from Investing Activities:
Capital expenditures (80.0) (77.6)
Acquisitions of businesses, net of
cash acquired (13.0) (12.9)
Proceeds from sale of businesses 123.9 -
Proceeds from sale of an equity
interest 8.8 -
Proceeds from the sale of property
and equipment 5.3 4.8
Cash provided (used) by
investing activities 45.0 (85.7)
Cash Flows from Financing Activities:
Net borrowings of short-term
facilities and long-term debt 2.1 174.8
Cash paid to settle convertible
debentures - (206.6)
Proceeds from settlement of swap
agreements - 50.7
Proceeds from stock option and
purchase plans 54.0 28.0
Excess tax benefit on exercise of
stock options 8.2 -
Repurchases of common stock (235.9) (217.6)
Dividends paid (50.8) (41.2)
Cash used by financing
activities (222.4) (211.9)
Effect of exchange rate changes on
cash 51.3 (48.1)
Change in cash and cash equivalents 233.0 (76.9)
Cash and cash equivalents, beginning
of period 454.9 531.8
Cash and cash equivalents, end of
period $687.9 $454.9
First Call Analyst:
FCMN Contact: linda.granrose@na.manpower.com
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SOURCE: Manpower Inc.
CONTACT: Mike Van Handel, Manpower Inc., +1-414-906-6305,
ormichael.vanhandel@manpower.com
Web site: http://www.manpower.com/
http://investor.manpower.com/
