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Manpower Reports 2nd Quarter and First Half 2007 Results

PRNewswire-FirstCall
MILWAUKEE
Jul 19, 2007

Manpower Inc. (NYSE: MAN) today reported that earnings per diluted share for the three months ended June 30, 2007 increased 104% to $1.86 from 91 cents in the prior year period. Net earnings in the quarter increased to $160.4 million from $80.4 million a year earlier. Revenues for the second quarter were $5.0 billion, an increase of 15 percent from the year earlier period.

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

Second quarter results were favorably impacted 66 cents per diluted share as a result of a change in the calculation of French payroll taxes retroactive to January 1, 2006. Of this amount, 45 cents relates to reduced payroll taxes for 2006, 10 cents for the first quarter of 2007 and 11 cents the second quarter of 2007. Second quarter results were also favorably impacted by 5 cents per diluted share as foreign currencies were relatively stronger compared to the second quarter of 2006. On a constant currency basis, revenues increased 9% over the prior year period.

"We continue to experience positive trends throughout the major geographies and segments of our business, with the European geography driving a substantial portion of our growth in both revenue and profit," said Jeffrey A. Joerres, Chairman and CEO.

"Throughout the world our organization continues to make great strides in securing growth at profitable levels, expanding our offering in permanent recruitment and driving efficiencies. The Manpower team is doing an impressive job of helping our clients win, while at the same time, improving our operational excellence.

"We are anticipating the third quarter of 2007 diluted earnings per share to be in the range of $1.39 to $1.43, which includes an estimated favorable currency impact of 8 cents," Joerres stated.

Earnings per diluted share for the six months ended June 30, 2007 were $2.54 compared to $1.50 per diluted share in 2006. Net earnings were $219.9 million compared to $133.0 million in the prior year. Revenues for the six-month period were $9.6 billion, an increase of 16 percent from the prior year or 9 percent in constant currency. Foreign currency exchange rates had a favorable impact of 10 cents for the six-month period.

Included in net earnings in the first half of 2006 is a 16 cent per diluted share charge related to reorganization costs and a global cost reduction initiative. Also included in the prior year period are earnings per diluted share from discontinued operations of 27 cents.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 19, 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 earnings 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 June 30
                                                              % Variance
                                                           Amount   Constant
                                           2007      2006  Reported Currency
                                                      (Unaudited)

  Revenues from services (a)             $5,034.4  $4,384.6   14.8%    8.8%

  Cost of services                        4,010.3   3,601.8   11.3%

   Gross profit                           1,024.1     782.8   30.8%   24.3%

  Selling and administrative expenses       747.1     644.7   15.9%   10.4%

   Operating profit                         277.0     138.1  100.7%   89.5%

  Interest and other expenses                 7.7      12.5  -38.1%

   Earnings before income taxes and
    discontinued operations                 269.3     125.6  114.5%  103.7%

  Provision for income taxes                108.9      46.0  137.0%

   Net earnings from continuing
    operations                              160.4      79.6  101.6%   91.4%

  Income from discontinued operations,
   net of income taxes                          -       0.8     N/A

   Net earnings                            $160.4     $80.4   99.6%   89.5%

  Net earnings per share - basic:
   Continuing operations                    $1.90     $0.91  108.8%
   Discontinued operations                      -      0.01     N/A
     Total                                  $1.90     $0.92  106.5%

  Net earnings per share - diluted:
   Continuing operations                    $1.86     $0.90  106.7%   96.7%
   Discontinued operations                      -      0.01     N/A
     Total                                  $1.86     $0.91  104.4%   94.5%

  Weighted average shares - basic            84.4      87.3   -3.3%

  Weighted average shares - diluted          86.2      88.7   -2.8%

  (a)  Revenues from services include fees received from our franchise
       offices of $9.0 million and $8.8 million for the three months ended
       June 30, 2007 and 2006, respectively.  These fees are primarily based
       on revenues generated by the franchise offices, which were $361.8
       million and $388.8 million for the three months ended June 30, 2007
       and 2006, respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                             Three Months Ended June 30
                                                              % Variance
                                                           Amount  Constant
                                          2007     2006  Reported  Currency
                                                      (Unaudited)
  Revenues from Services:
   United States (a)                     $488.6    $534.6   -8.6%   -8.6%
   France                               1,784.9   1,535.6   16.2%    8.5%
   Other EMEA (b)                       1,582.0   1,257.5   25.8%   17.2%
   Italy (b)                              353.8     291.7   21.3%   13.3%
   Jefferson Wells                         83.8      98.8  -15.1%  -15.1%
   Right Management                       105.8     102.6    3.2%   -0.4%
   Other Operations                       635.5     563.8   12.7%   10.8%
                                       $5,034.4  $4,384.6   14.8%    8.8%

  Operating Unit Profit:
   United States                          $26.1     $22.5   16.2%   16.2%
   France                                 163.7      49.7  229.1%  209.3%
   Other EMEA (b)                          55.7      29.5   89.0%   77.7%
   Italy (b)                               29.1      21.2   37.4%   28.5%
   Jefferson Wells                          1.1      10.0  -89.0%  -89.0%
   Right Management                        11.0      11.1    0.1%   -3.8%
   Other Operations                        15.0      14.8    1.6%    1.7%
                                          301.7     158.8
  Corporate expenses                       21.4      17.4
  Amortization of intangible assets         3.3       3.3
   Operating profit                       277.0     138.1  100.7%   89.5%
  Interest and other expenses (c)           7.7      12.5
   Earnings before income taxes
    and discontinued operations          $269.3    $125.6

  (a)  In the United States, revenues from services include fees received
       from the related franchise offices of $6.5 million and $6.0 million
       for the three months ended June 30, 2007 and 2006, respectively.
       These fees are primarily based on revenues generated by the franchise
       offices, which were $278.5 million and $291.9 million for the three
       months ended June 30, 2007 and 2006, respectively.

  (b)  Italy and Other EMEA were combined as the EMEA segment in previous
       years. All previous years' results have been revised to conform to
       the current year presentation.

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

       Interest expense                   $15.3     $13.1
       Interest income                     (8.4)     (3.8)
       Foreign exchange losses              0.1       1.3
       Miscellaneous expenses, net          0.7       1.9
                                           $7.7     $12.5



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

                                              Six Months Ended June 30
                                                              % Variance
                                                           Amount   Constant
                                          2007      2006  Reported  Currency
                                                     (Unaudited)

  Revenues from services (a)            $9,570.0  $8,261.8   15.8%    9.2%

  Cost of services                       7,745.9   6,785.8   14.1%

   Gross profit                          1,824.1   1,476.0   23.6%   16.9%

  Selling and administrative expenses    1,443.8   1,277.6   13.0%    7.2%

   Operating profit                        380.3     198.4   91.7%   79.6%

  Interest and other expenses               17.3      25.5  -32.0%

   Earnings before income taxes
    and discontinued operations            363.0     172.9  110.0%   98.4%

  Provision for income taxes               143.1      63.8  124.3%

   Net earnings from continuing
    operations                             219.9     109.1  101.6%   90.5%

  Income from discontinued operations,
   net of income taxes                         -      23.9     N/A

   Net earnings                           $219.9     133.0   65.4%   56.3%

  Net earnings per share - basic:
   Continuing operations                   $2.60     $1.25  108.0%
   Discontinued operations                     -      0.27     N/A
     Total                                 $2.60     $1.52   71.1%

  Net earnings per share - diluted:
   Continuing operations                   $2.54     $1.23  106.5%   95.1%
   Discontinued operations                     -      0.27     N/A
     Total                                 $2.54     $1.50   69.3%   60.0%

  Weighted average shares - basic           84.6      87.3   -3.1%

  Weighted average shares - diluted         86.5      88.8   -2.6%

  (a)  Revenues from services include fees received from our franchise
       offices of $17.4 million and $16.8 million for the six months ended
       June 30, 2007 and 2006, respectively. These fees are primarily based
       on revenues generated by the franchise offices, which were $724.2
       million and $751.6 million for the six months ended June 30, 2007 and
       2006, respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                              Six Months Ended June 30
                                                              % Variance
                                                           Amount   Constant
                                           2007     2006  Reported  Currency
                                                      (Unaudited)
  Revenues from Services:
   United States (a)                      $972.2  $1,044.9   -7.0%   -7.0%
   France                                3,277.9   2,776.1   18.1%    9.3%
   Other EMEA (b)                        3,058.4   2,407.3   27.0%   17.1%
   Italy (b)                               658.6     534.1   23.3%   14.2%
   Jefferson Wells                         165.1     194.3  -15.0%  -15.0%
   Right Management                        199.7     197.9    0.9%   -2.9%
   Other Operations                      1,238.1   1,107.2   11.8%   10.7%
                                        $9,570.0  $8,261.8   15.8%   9.2%

  Operating Unit Profit:
   United States                           $37.6     $32.0   17.8%   17.8%
   France                                  207.6      80.1  159.0%  142.2%
   Other EMEA (b)                           92.4      43.1  114.2%   98.9%
   Italy (b)                                45.5      30.6   49.0%   38.3%
   Jefferson Wells                           2.1      15.7  -86.6%  -86.6%
   Right Management                         17.1      15.7    9.5%    5.8%
   Other Operations                         27.8      32.4  -14.3%  -14.5%
                                           430.1     249.6
  Corporate expenses                        43.3      44.7
  Amortization of intangible assets          6.5       6.5
   Operating profit                        380.3     198.4   91.7%   79.6%
  Interest and other expenses (c)           17.3      25.5
   Earnings before income taxes and
    discontinued operations               $363.0    $172.9

  (a)  In the United States, revenues from services include fees received
       from the related franchise offices of $11.8 million and $11.3 million
       for the six months ended June 30, 2007 and 2006, respectively.  These
       fees are primarily based on revenues generated by the franchise
       offices, which were $547.6 million and $574.2 million for the six
       months ended June 30, 2007 and 2006, respectively.

  (b)  Italy and Other EMEA were combined as the EMEA segment in previous
       years.  All previous years' results have been revised to conform to
       the current year presentation.

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

        Interest expense                   $29.5     $24.7
        Interest income                    (15.6)     (7.1)
        Foreign exchange losses              0.2       2.2
        Miscellaneous expenses, net          3.2       5.7
                                           $17.3     $25.5



                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                            June 30           Dec. 31
                                              2007              2006
                                                   (Unaudited)
  ASSETS
  Current assets:
   Cash and cash equivalents                 $710.8            $687.9
   Accounts receivable, net                 4,214.9           3,837.2
   Prepaid expenses and other assets          134.9              90.5
   Future income tax benefits                  76.4              66.4
     Total current assets                   5,137.0           4,682.0

  Other assets:
   Goodwill and other intangible
    assets, net                             1,323.1           1,293.6
   Other assets                               329.9             336.4
     Total other assets                     1,653.0           1,630.0

  Property and equipment:
   Land, buildings, leasehold
    improvements and equipment                738.2             693.2
   Less:  accumulated depreciation and
    amortization                              531.7             491.1
   Net property and equipment                 206.5             202.1
     Total assets                          $6,996.5          $6,514.1

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
   Accounts payable                        $1,005.6            $889.9
   Employee compensation payable              192.9             180.7
   Accrued liabilities                        655.0             562.1
   Accrued payroll taxes and insurance        616.6             699.9
   Value added taxes payable                  573.9             517.0
   Short-term borrowings and current
    maturities of long-term debt               35.8              32.0
     Total current liabilities              3,079.8           2,881.6

  Other liabilities:
   Long-term debt                             811.9             791.2
   Other long-term liabilities                439.2             367.1
     Total other liabilities                1,251.1           1,158.3

  Shareholders' equity:
   Common stock                                 1.0               1.0
   Capital in excess of par value           2,464.6           2,420.7
   Retained earnings                          805.5             617.0
   Accumulated other comprehensive
    income                                    164.4             120.6
   Treasury stock, at cost                   (769.9)           (685.1)
     Total shareholders' equity             2,665.6           2,474.2
      Total liabilities and
        shareholders' equity               $6,996.5          $6,514.1



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

                                                 Six Months Ended
                                                     June 30
                                              2007              2006
                                                    (Unaudited)
  Cash Flows from Operating Activities:
   Net earnings                              $219.9            $133.0
   Adjustments to reconcile net
    earnings to net cash provided
    by operating activities:
     Gain on sale of business                     -             (29.3)
     Depreciation and amortization             44.1              43.8
     Deferred income taxes                     41.8             (25.3)
     Provision for doubtful accounts            8.8              11.8
     Share-based compensation                  11.8              10.2
     Excess tax benefit on exercise
      of stock options                         (5.4)             (1.6)
   Changes in operating assets and
    liabilities, excluding
    the impact of acquisitions:
     Accounts receivable                     (296.2)           (216.4)
     Other assets                             (42.9)             18.1
     Other liabilities                        159.4             191.3
         Cash provided by
          operating activities                141.3             135.6

  Cash Flows from Investing Activities:
   Capital expenditures                       (41.8)            (34.8)
   Acquisitions of businesses, net of
    cash acquired                             (18.1)             (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                               5.0               3.1
         Cash used by investing
          activities                          (54.9)             (0.5)

  Cash Flows from Financing Activities:
   Net borrowings of short-term
    facilities and long-term debt               3.0             250.8
   Proceeds from stock option and
    purchase plans                             31.7              40.6
   Excess tax benefit on exercise of
    stock options                               5.4               1.6
   Repurchases of common stock                (89.0)           (119.1)
   Dividends paid                             (27.1)            (23.7)
         Cash (used) provided by
          financing activities                (76.0)            150.2

  Effect of exchange rate changes on cash      12.5              27.9
  Change in cash and cash equivalents          22.9             313.2

  Cash and cash equivalents, beginning
   of period                                  687.9             454.9
  Cash and cash equivalents, end of
   period                                    $710.8            $768.1

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

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

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


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