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Manpower Reports 2nd Quarter and First Half 2008 Results

PRNewswire-FirstCall
MILWAUKEE
Jul 18, 2008

Manpower Inc. (NYSE: MAN) today reported that earnings per diluted share for the three months ended June 30, 2008 were $1.34 compared to $1.86 in the prior year period. Net earnings in the quarter were $107.4 million compared to $160.4 million a year earlier. Revenues for the second quarter were $5.9 billion, an increase of 17 percent from the year earlier period.

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

Second quarter 2008 results include a net charge of $14.8 million after tax, or 18 cents per diluted share. This net charge is comprised of income of $35.2 million after tax, or 44 cents per diluted share, related to recoverable 2005 payroll taxes in France, offset by a charge of $50.0 million after tax, or 62 cents per diluted share, related to an increase in our legal reserve pertaining to allegations by the French Competition Council. Second quarter results were also favorably impacted by 21 cents per diluted share as foreign currencies were relatively stronger compared to the second quarter of 2007. On a constant currency basis, revenues increased 5% over the prior year period.

Second quarter 2007 results were favorably impacted $57.2 million after tax, or 66 cents per diluted share, as a result of a change in the calculation of French payroll taxes for 2006 and the first half of 2007.

Jeffrey A. Joerres, Manpower Inc. Chairman and Chief Executive Officer, said, "Despite a more difficult economic environment, the Manpower team performed well in the second quarter, supported by our geographically balanced portfolio of services. We were able to increase our revenues to record levels, contributed primarily by many of our major European countries. At the same time, we have experienced some stabilization in the U.S. operations. Right Management, our career transition and organizational consulting business, is doing well and continues to add strategic value to our clients. Although the economic environment has softened, we are confident that we are well-positioned and well-equipped to maximize the opportunities that typically come with economic downturns.

"We are anticipating the third quarter of 2008 diluted earnings per share to be in the range of $1.45 to $1.49, which includes an estimated favorable currency impact of 17 cents," Joerres stated.

Earnings per diluted share for the six months ended June 30, 2008 were $2.27 compared to $2.54 per diluted share in 2007. Net earnings were $182.9 million compared to $219.9 million in the prior year. Revenues for the six-month period were $11.3 billion, an increase of 18 percent from the prior year or 6 percent in constant currency. Foreign currency exchange rates had a favorable impact of 36 cents for the six-month period.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 18, 2008 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. Celebrating its 60th anniversary in 2008, the $21 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 4,500 offices in 80 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, 2007, 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
                                         2008      2007   Reported  Currency
                                                    (Unaudited)

  Revenues from services (a)           $5,904.9  $5,034.4   17.3%      5.4%

  Cost of services                      4,751.3   4,010.3   18.5%

    Gross profit                        1,153.6   1,024.1   12.6%      1.3%

  Selling and administrative expenses     946.3     747.1   26.7%     14.7%

    Operating profit                      207.3     277.0  -25.2%    -34.9%

  Interest and other expenses              13.9       7.7   77.4%

    Earnings before income taxes          193.4     269.3  -28.2%    -38.3%

  Provision for income taxes               86.0     108.9  -21.0%

    Net earnings                         $107.4    $160.4  -33.0%    -42.5%

  Net earnings per share - basic          $1.36     $1.90  -28.4%

  Net earnings per share - diluted        $1.34     $1.86  -28.0%    -38.2%

  Weighted average shares - basic          79.2      84.4   -6.2%

  Weighted average shares - diluted        80.3      86.2   -6.8%

  (a)  Revenues from services include fees received from our franchise
       offices of $8.3 million and $9.0 million for the three months ended
       June 30, 2008 and 2007, respectively.  These fees are primarily based
       on revenues generated by the franchise offices which were
       $325.4 million and $361.8 million for the three months ended ended
       June 30, 2008 and 2007, respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                          Three Months Ended June 30
                                                             % Variance
                                                           Amount   Constant
                                         2008      2007   Reported  Currency
                                                    (Unaudited)
  Revenues from Services:
    United States (a)                    $491.6    $488.6    0.6%      0.6%
    France                              1,958.1   1,784.9    9.7%     -5.4%
    Other EMEA                          2,050.7   1,582.0   29.6%     17.6%
    Italy                                 441.4     353.8   24.8%      7.6%
    Jefferson Wells                        75.8      83.8   -9.6%     -9.6%
    Right Management                      115.7     105.8    9.4%      4.1%
    Other Operations                      771.6     635.5   21.5%      9.9%
                                       $5,904.9  $5,034.4   17.3%      5.4%

  Operating Unit Profit:
    United States                         $14.8     $26.1  -43.3%    -43.3%
    France                                 69.8     163.7  -57.3%    -63.2%
    Other EMEA                             85.1      55.7   53.0%     36.0%
    Italy                                  37.6      29.1   29.3%     11.6%
    Jefferson Wells                        (1.6)      1.1     N/A       N/A
    Right Management                       13.3      11.0   21.3%     15.5%
    Other Operations                       16.6      15.0    9.4%     -4.5%
                                          235.6     301.7
  Corporate expenses                       25.0      21.4
  Amortization of intangible assets         3.3       3.3
    Operating profit                      207.3     277.0  -25.2%    -34.9%
  Interest and other expenses (b)          13.9       7.7
    Earnings before income taxes         $193.4    $269.3

  (a)  In the United States, revenues from services include fees received
       from our franchise offices of $4.7 million and $6.5 million for the
       three months ended June 30, 2008 and 2007, respectively.  These fees
       are primarily based on revenues generated by the franchise offices,
       which were $214.6 million and $278.5 million for the three months
       ended June 30, 2008 and 2007, respectively.

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

          Interest expense                $17.1     $13.1
          Interest income                  (6.0)     (6.2)
          Foreign exchange losses           0.4       0.1
          Miscellaneous expenses, net       2.4       0.7
                                          $13.9      $7.7



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

                                             Six Months Ended June 30
                                                             % Variance
                                                           Amount   Constant
                                        2008       2007   Reported  Currency
                                                    (Unaudited)

  Revenues from services (a)          $11,291.5  $9,570.0   18.0%      6.4%

  Cost of services                      9,170.2   7,745.9   18.4%

    Gross profit                        2,121.3   1,824.1   16.3%      5.0%

  Selling and administrative expenses   1,782.0   1,443.8   23.4%     12.3%

    Operating profit                      339.3     380.3  -10.8%    -22.5%

  Interest and other expenses              25.2      17.3   44.8%

    Earnings before income taxes          314.1     363.0  -13.5%    -25.9%

  Provision for income taxes              131.2     143.1   -8.3%

    Net earnings                         $182.9    $219.9  -16.8%    -28.8%

  Net earnings per share - basic          $2.31     $2.60  -11.2%

  Net earnings per share - diluted        $2.27     $2.54  -10.6%    -23.2%

  Weighted average shares - basic          79.3      84.6   -6.3%

  Weighted average shares - diluted        80.4      86.5   -7.0%

  (a)  Revenues from services include fees received from our franchise
       offices of $15.6 million and $17.4 million for the six months ended
       June 30, 2008 and 2007.  These fees are primarily based on revenues
       generated by the franchise offices, which were $629.4 million and
       $724.2 million for the six months ended June 30, 2008 and 2007,
       respectively.



                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                             Six Months Ended June 30
                                                             % Variance
                                                           Amount   Constant
                                          2008     2007   Reported  Currency
                                                    (Unaudited)
  Revenues from Services:
    United States (a)                    $963.1    $972.2   -0.9%     -0.9%
    France                              3,692.1   3,277.9   12.6%     -2.2%
    Other EMEA                          3,904.4   3,058.4   27.7%     16.1%
    Italy                                 842.6     658.6   27.9%     11.0%
    Jefferson Wells                       153.2     165.1   -7.2%     -7.2%
    Right Management                      219.0     199.7    9.7%      4.3%
    Other Operations                    1,517.1   1,238.1   22.5%     10.8%
                                      $11,291.5  $9,570.0   18.0%      6.4%

  Operating Unit Profit:
    United States                         $22.0     $37.6  -41.6%    -41.6%
    France                                123.8     207.6  -40.3%    -48.3%
    Other EMEA                            132.8      92.4   43.8%     28.5%
    Italy                                  66.7      45.5   46.5%     27.1%
    Jefferson Wells                        (4.2)      2.1     N/A       N/A
    Right Management                       20.0      17.1   16.8%     13.3%
    Other Operations                       37.9      27.8   36.1%     20.1%
                                          399.0     430.1
  Corporate expenses                       53.2      43.3
  Amortization of intangible assets         6.5       6.5
    Operating profit                      339.3     380.3  -10.8%    -22.5%
  Interest and other expenses (b)          25.2      17.3
    Earnings before income taxes         $314.1    $363.0

  (a)  In the United States, revenues from services include fees received
       from our franchise offices of $9.3 million and $11.8 million for the
       six months ended June 30, 2008 and 2007, respectively.  These fees
       are primarily based on revenues generated by the franchise offices,
       which were $427.3 million and $547.6 million for the six months ended
       June 30, 2008 and 2007, respectively.

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

          Interest expense                $32.7     $25.1
          Interest income                 (11.1)    (11.2)
          Foreign exchange (gain) loss     (1.5)      0.2
          Miscellaneous expenses, net       5.1       3.2
                                          $25.2     $17.3



                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                Jun. 30           Dec. 31
                                                  2008              2007
                                                       (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $561.3            $537.5
    Accounts receivable, net                     4,857.6           4,478.8
    Prepaid expenses and other assets              150.4             122.2
    Future income tax benefits                      76.7              76.3
      Total current assets                       5,646.0           5,214.8

  Other assets:
    Goodwill and other intangible
     assets, net                                 1,602.3           1,410.7
    Other assets                                   398.2             377.7
      Total other assets                         2,000.5           1,788.4

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    842.7             760.8
    Less: accumulated depreciation and
     amortization                                  601.7             539.6
      Net property and equipment                   241.0             221.2
        Total assets                            $7,887.5          $7,224.4

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                            $1,208.3          $1,014.4
    Employee compensation payable                  217.7             213.6
    Accrued liabilities                            726.1             679.4
    Accrued payroll taxes and insurance            739.1             724.7
    Value added taxes payable                      630.1             583.7
    Short-term borrowings and current
     maturities of long-term debt                   69.3              39.7
      Total current liabilities                  3,590.6           3,255.5

  Other liabilities:
    Long-term debt                                 944.5             874.8
    Other long-term liabilities                    448.3             424.8
      Total other liabilities                    1,392.8           1,299.6

  Shareholders' equity:
    Common stock                                     1.0               1.0
    Capital in excess of par value               2,505.7           2,481.8
    Retained earnings                            1,194.0           1,040.3
    Accumulated other comprehensive
     income                                        356.8             257.6
    Treasury stock, at cost                     (1,153.4)         (1,111.4)
      Total shareholders' equity                 2,904.1           2,669.3
        Total liabilities and
         shareholders' equity                   $7,887.5          $7,224.4



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

                                                     Six Months Ended
                                                         Jun. 30
                                                  2008              2007
                                                       (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                  $182.9            $219.9
    Adjustments to reconcile net
     earnings to net cash provided by
     operating activities:
      Depreciation and amortization                 53.4              44.1
      Deferred income taxes                          8.7              41.8
      Provision for doubtful accounts                8.4               8.8
      Share-based compensation                      14.3              11.8
      Excess tax benefit on exercise
       of stock options                             (0.1)             (5.4)
    Changes in operating assets and
     liabilities, excluding the impact
     of acquisitions:
      Accounts receivable                          (75.8)           (296.2)
      Other assets                                  (6.1)            (42.9)
      Other liabilities                             78.3             159.4
        Cash provided by operating
         activities                                264.0             141.3

  Cash Flows from Investing Activities:
    Capital expenditures                           (51.4)            (41.8)
    Acquisitions of businesses, net of
     cash acquired                                (193.7)            (18.1)
    Proceeds from the sale of property
     and equipment                                   4.4               5.0
      Cash used by investing activities           (240.7)            (54.9)

  Cash Flows from Financing Activities:
    Net borrowings of short-term
     facilities and long-term debt                  26.0               3.0
    Proceeds from stock option and
     purchase plans                                 11.1              31.7
    Excess tax benefit on exercise of
     stock options                                   0.1               5.4
    Repurchases of common stock                    (52.7)            (89.0)
    Dividends paid                                 (29.2)            (27.1)
      Cash used by financing activities            (44.7)            (76.0)

  Effect of exchange rate changes on
   cash                                             45.2              12.5
  Change in cash and cash equivalents               23.8              22.9

  Cash and cash equivalents, beginning
   of period                                       537.5             687.9
  Cash and cash equivalents, end of
   period                                         $561.3            $710.8

First Call Analyst:
FCMN Contact: linda.granrose@na.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 Inc., +1-414-906-6305,
michael.vanhandel@manpower.com

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


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