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Manpower Reports 1st Quarter 2007 Results

PRNewswire-FirstCall
MILWAUKEE
Apr 20, 2007

Manpower Inc. (NYSE: MAN) today reported that net earnings from continuing operations for the three months ended March 31, 2007 more than doubled to $59.5 million, or 69 cents per diluted share, compared to $29.5 million, or 33 cents per diluted share, a year earlier. Revenues for the first quarter were $4.5 billion, an increase of 17 percent from the year earlier period.

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

Results for the first quarter were favorably impacted by 5 cents per diluted share as foreign currencies were relatively stronger compared to the first quarter of 2006. On a constant currency basis, revenues increased 10 percent over the prior year period. Included in prior year net earnings of 59 cents per diluted share is 26 cents per diluted share of earnings related to discontinued operations. Also included in prior year net earnings is a 16 cents per diluted share charge related to reorganization costs and a global cost reduction initiative.

Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "The strength of our European geography combined with company-wide operational excellence resulted in a very strong first quarter for Manpower.

"The Manpower team is executing extremely well, our Other EMEA segment (Europe excluding France and Italy) increased profitability by 144 percent, while Manpower France, our single largest operation, increased profitability by 33 percent on a constant currency basis. The U.S. operation, expectedly, experienced softness in revenue, but realized an increase in profitability of 22 percent.

"Our ability to deliver such strong earnings, given the softness in the U.S. market, demonstrates the strength of our geographic and business mix as well as the underlying quality, talent and dedication of our people throughout the world.

"Given the current trends, we anticipate our second quarter diluted earnings per share to be in the range of $1.12 to $1.16, which includes an estimated favorable currency impact of 6 cents."

In conjunction with its first quarter earnings release, Manpower will broadcast its conference call live over the Internet on April 20, 2007 at 7:30 a.m. CDT (8:30 a.m. EDT). Interested parties are invited to listen to the webcast and view the presentation 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, 2006, which information is incorporated herein by reference.

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

                                             Three Months Ended March 31
                                                               % Variance

                                                           Amount   Constant
                                          2007     2006   Reported  Currency
                                                    (Unaudited)

  Revenues from services (a)           $4,535.6  $3,877.2   17.0%      9.6%

  Cost of services                      3,735.6   3,184.0   17.3%

    Gross profit                          800.0     693.2   15.4%      8.5%

  Selling and administrative expenses     696.7     632.9   10.1%      3.9%

    Operating profit                      103.3      60.3   71.2%     57.1%

  Interest and other expenses               9.6      13.0  -26.2%

    Earnings before income taxes and
     discontinued operations               93.7      47.3   97.9%     84.5%

  Provision for income taxes               34.2      17.8   91.5%

    Net earnings from continuing
     operations                            59.5      29.5  101.8%     88.1%

  Income from discontinued operations,
   net of income taxes                      --       23.1    N/A

    Net earnings                          $59.5     $52.6   13.1%      5.4%

  Net earnings per share - basic:
    Continuing operations                 $0.70     $0.34  105.9%
    Discontinued operations                 --       0.26    N/A
        Total                             $0.70     $0.60   16.7%

  Net earnings per share - diluted:
    Continuing operations                 $0.69     $0.33  109.1%     93.9%
    Discontinued operations                 --       0.26    N/A
        Total                             $0.69     $0.59   16.9%      8.5%

  Weighted average shares - basic          84.9      87.4   -2.9%

  Weighted average shares - diluted        86.5      88.7   -2.4%

  (a)  Revenues from services include fees received from our franchise
       offices of $8.4 million and $8.0 million for the three months ended
       March 31, 2007 and 2006, respectively.  These fees are primarily
       based on revenues generated by the franchise offices, which were
       $362.4 million and $362.8 million for the three months ended
       March 31, 2007 and 2006, respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                            Three Months Ended March 31
                                                               % Variance
                                                           Amount   Constant
                                         2007       2006  Reported  Currency
                                                    (Unaudited)
  Revenues from Services:
    United States (a)                    $483.6    $510.3   -5.2%     -5.2%
    France                              1,493.0   1,240.5   20.4%     10.4%
    Other EMEA (b)                      1,476.4   1,149.8   28.4%     17.0%
    Italy (b)                             304.8     242.4   25.7%     15.3%
    Jefferson Wells                        81.3      95.5  -14.9%    -14.9%
    Right Management                       93.9      95.3   -1.5%     -5.5%
    Other Operations                      602.6     543.4   10.9%     10.6%
                                       $4,535.6  $3,877.2   17.0%      9.6%

  Operating Unit Profit:
    United States                         $11.5      $9.5   21.6%     21.6%
    France                                 43.9      30.4   44.4%     32.6%
    Other EMEA (b)                         36.7      13.6  168.6%    144.5%
    Italy (b)                              16.4       9.4   75.2%     60.4%
    Jefferson Wells                         1.0       5.7  -82.4%    -82.4%
    Right Management                        6.1       4.6   31.8%     28.7%
    Other Operations                       12.8      17.6  -27.7%    -28.1%
                                          128.4      90.8
  Corporate expenses                       21.9      27.3
  Amortization of intangible assets         3.2       3.2
    Operating profit                      103.3      60.3   71.2%     57.1%
  Interest and other expenses (c)           9.6      13.0
    Earnings before income taxes
     and discontinued operations          $93.7     $47.3

  (a)  In the United States, revenues from services include fees received
       from the related franchise offices of $5.3 million for the three
       months ended March 31, 2007 and 2006.  These fees are primarily based
       on revenues generated by the franchise offices, which were
       $269.1 million and $282.3 million for the three months ended
       March 31, 2007 and 2006, respectively.

  (b)  Italy and Other EMEA were previously combined as the EMEA segment.
       All previously reported results have been revised to conform to the
       current year presentation.

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

       Interest expense                $14.2     $11.6
       Interest income                  (7.2)     (3.3)
       Foreign exchange losses           0.1       0.9
       Miscellaneous expenses            2.5       3.8
                                        $9.6     $13.0



                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                 Mar. 31           Dec. 31
                                                   2007              2006
                                                        (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $727.3            $687.9
    Accounts receivable, net                     3,775.2           3,837.2
    Prepaid expenses and other assets              142.4              90.5
    Future income tax benefits                      87.0              66.4
        Total current assets                     4,731.9           4,682.0

  Other assets:
    Goodwill and other intangible
     assets, net                                 1,305.7           1,293.6
    Other assets                                   320.7             336.4
        Total other assets                       1,626.4           1,630.0

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    712.5             693.2
    Less: accumulated depreciation and
     amortization                                  511.1             491.1
      Net property and equipment                   201.4             202.1
          Total assets                          $6,559.7          $6,514.1

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $939.2            $889.9
    Employee compensation payable                  150.2             180.7
    Accrued liabilities                            554.4             562.1
    Accrued payroll taxes and insurance            652.2             699.9
    Value added taxes payable                      510.7             517.0
    Short-term borrowings and current
      maturities of long-term debt                  36.1              32.0
        Total current liabilities                2,842.8           2,881.6

  Other liabilities:
    Long-term debt                                 800.5             791.2
    Other long-term liabilities                    416.1             367.1
        Total other liabilities                  1,216.6           1,158.3

  Shareholders' equity:
    Common stock                                     1.0               1.0
    Capital in excess of par value               2,446.7           2,420.7
    Retained earnings                              672.2             617.0
    Accumulated other comprehensive
     income                                        136.2             120.6
    Treasury stock, at cost                       (755.8)           (685.1)
        Total shareholders' equity               2,500.3           2,474.2
          Total liabilities and
           shareholders' equity                 $6,559.7          $6,514.1



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

                                                      Three Months Ended
                                                           Mar. 31
                                                   2007              2006
                                                         (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                   $59.5             $52.6
    Adjustments to reconcile net
     earnings to net cash provided
      by operating activities:
        Gain on sale of business                     --              (29.3)
        Depreciation and amortization               21.5              21.8
        Deferred income taxes                       15.7             (10.0)
        Provision for doubtful accounts              5.1               6.1
        Stock based compensation                     5.7               4.6
        Excess tax benefit on exercise
         of stock options                           (2.3)             (2.7)
        Changes in operating assets and
         liabilities excluding the impact
          of acquisitions:
            Accounts receivable                     88.2              76.9
            Other assets                           (57.4)            (19.5)
            Other liabilities                      (33.2)            (26.0)
              Cash provided by
               operating activities                102.8              74.5

  Cash Flows from Investing Activities:
    Capital expenditures                           (16.8)            (15.2)
    Acquisitions of businesses, net of
     cash acquired                                  (5.0)             (7.2)
    Proceeds from sale of business                   --               29.6
    Proceeds from sale of an equity
     interest                                        --                8.8
    Proceeds from the sale of property
     and equipment                                   1.6               2.2
              Cash (used) provided by
               investing activities                (20.2)             18.2

  Cash Flows from Financing Activities:
    Net borrowings of short-term
      facilities and long-term debt                  3.8               3.2
    Proceeds from stock option and
     purchase plans                                 20.0              26.5
    Excess tax benefit on exercise of
     stock options                                   2.3               2.7
    Repurchases of common stock                    (72.7)            (33.0)
              Cash used by financing
               activities                          (46.6)             (0.6)

  Effect of exchange rate changes on cash            3.4               7.5
  Change in cash and cash equivalents               39.4              99.6

  Cash and cash equivalents, beginning
   of period                                       687.9             454.9
  Cash and cash equivalents, end of
   period                                         $727.3            $554.5

First Call Analyst:
FCMN Contact: linda.granrose@na.manpower.com

Photo: 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 of Manpower Inc., +1-414-906-6305,
michael.vanhandel@manpower.com

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


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