MILWAUKEE, Oct. 17 /PRNewswire-FirstCall/ — Manpower Inc. (NYSE:MAN) today reported that earnings per diluted share for the three months ended September 30, 2007 increased 35% to $1.57 from $1.16 in the prior year period. Net earnings in the quarter increased to $131.7 million from $100.6 million a year earlier. Revenues for the third quarter were $5.3 billion, an increase of 15 percent from the year earlier period.
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Third quarter results were favorably impacted by 8 cents per diluted share as foreign currencies were relatively stronger compared to the third quarter of 2006. On a constant currency basis, revenues increased 8% over the prior year period.
“The Manpower team throughout the world continues to perform extremely well,” said Jeffrey A. Joerres, Chairman and CEO. “Once again, the strength of the group’s geographic presence and business portfolio are clearly evident in our results. The Netherlands, Germany, Belgium and Elan — our Pan-European IT staffing company — all performed well. Additionally, Right Management, our outplacement and organizational consulting company, is showing momentum across all geographies.
“Although we do detect a bit of caution in the markets, as we look to the fourth quarter, we do not believe it will significantly affect our performance. We are anticipating the fourth quarter of 2007 diluted earnings per share to be in the range of $1.50 to $1.54, which includes an estimated favorable currency impact of 10 cents,” Joerres stated.
Earnings per diluted share for the nine months ended September 30, 2007, were $4.10 compared to $2.65 per diluted share in 2006. Net earnings were $351.6 million compared to $233.6 million in the prior year. Revenues for the nine-month period were $14.9 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 19 cents for the nine-month period.
Included in net earnings for the nine months ended September 30, 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 31 cents.
On July 27, 2007, Manpower filed a Form 8-K indicating that the French payroll tax benefit arising from the revised payroll tax calculation announced by the social security office in April 2007 would no longer apply after September 30, 2007. Included in earnings per diluted share is a favorable impact from the revised calculation of 19 cents and 85 cents for the three-month and nine-month period ending September 30, 2007, respectively. Manpower’s previously-issued third-quarter earnings guidance anticipated an estimated benefit from the reduced payroll taxes of 14 cents per diluted share.
In conjunction with its third quarter earnings release, Manpower will broadcast its conference call live over the Internet on October 17, 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 September 30
% Variance
Amount Constant
2007 2006 Reported Currency
(Unaudited)Revenues from services (a) $5,295.4 $4,590.0 15.4% 8.5%
Cost of services 4,321.0 3,785.8 14.1%
Gross profit 974.4 804.2 21.2% 14.2%
Selling and administrative expenses 752.5 640.3 17.5% 11.2%
Operating profit 221.9 163.9 35.3% 26.0%
Interest and other expenses 9.1 10.6 -15.0%
Earnings before income taxes and
discontinued operations 212.8 153.3 38.8% 30.0%Provision for income taxes 81.1 56.3 44.2%
Net earnings from continuing
operations 131.7 97.0 35.7% 27.3%Income from discontinued operations,
net of income taxes – 3.6 N/ANet earnings $131.7 $100.6 31.0% 22.9%
Net earnings per share — basic:
Continuing operations $1.59 $1.14 39.5%
Discontinued operations – 0.04 N/A
Total $1.59 $1.18 34.7%Net earnings per share — diluted:
Continuing operations $1.57 $1.12 40.2% 31.3%
Discontinued operations – 0.04 N/A
Total $1.57 $1.16 35.3% 26.7%Weighted average shares — basic 82.7 85.3 -3.0%
Weighted average shares — diluted 84.1 86.7 -3.0%
(a) Revenues from services include fees received from our franchise
offices of $9.4 million and $9.6 million for the three months ended
September 30, 2007 and 2006, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$387.4 million and $392.3 million for the three months ended
September 30, 2007 and 2006, respectively.Manpower Inc.
Operating Unit Results
(In millions)Three Months Ended September 30
% Variance
Amount Constant
2007 2006 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $502.2 $542.1 -7.4% -7.4%
France 1,871.3 1,654.0 13.1% 4.8%
Other EMEA (b) 1,740.3 1,353.4 28.6% 19.1%
Italy (b) 334.5 276.3 21.1% 12.0%
Jefferson Wells 85.5 93.9 -8.9% -8.9%
Right Management 98.7 90.5 9.0% 4.6%
Other Operations 662.9 579.8 14.4% 10.7%
$5,295.4 $4,590.0 15.4% 8.5%Operating Unit Profit:
United States $24.1 $28.6 -15.9% -15.9%
France 100.7 62.0 62.7% 50.7%
Other EMEA (b) 74.4 49.2 51.4% 40.6%
Italy (b) 24.6 16.7 46.4% 34.9%
Jefferson Wells (1.7) 10.0 -117.2% -117.2%
Right Management 5.7 2.2 157.4% 147.4%
Other Operations 18.8 16.4 13.4% 11.0%
246.6 185.1
Corporate expenses 21.4 17.9
Amortization of intangible assets 3.3 3.3
Operating profit 221.9 163.9 35.3% 26.0%
Interest and other expenses (c) 9.1 10.6
Earnings before income taxes
and discontinued operations $212.8 $153.3(a) In the United States, revenues from services include fees received
from the related franchise offices of $6.5 million and $6.6 million
for the three months ended September 30, 2007 and 2006, respectively.
These fees are primarily based on revenues generated by the franchise
offices, which were $270.7 million and $285.9 million for the three
months ended September 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 $17.0 $14.4
Interest income (8.7) (4.4)
Foreign exchange (gain) loss (0.1) 0.3
Miscellaneous expenses, net 0.9 0.3
$9.1 $10.6Manpower Inc.
Results of Operations
(In millions, except per share data)Nine Months Ended September 30
% Variance
Amount Constant
2007 2006 Reported Currency
(Unaudited)Revenues from services (a) $14,865.4 $12,851.8 15.7% 8.9%
Cost of services 12,066.9 10,571.6 14.1%
Gross profit 2,798.5 2,280.2 22.7% 16.0%
Selling and administrative expenses 2,196.3 1,917.9 14.5% 8.5%
Operating profit 602.2 362.3 66.2% 55.3%
Interest and other expenses 26.4 36.1 -27.1%
Earnings before income taxes
and discontinued operations 575.8 326.2 76.5% 66.2%Provision for income taxes 224.2 120.1 86.7%
Net earnings from continuing
operations 351.6 206.1 70.6% 60.6%Income from discontinued operations,
net of income taxes – 27.5 N/ANet earnings $351.6 233.6 50.5% 41.7%
Net earnings per share — basic:
Continuing operations $4.19 $2.38 76.1%
Discontinued operations – 0.32 N/A
Total $4.19 $2.70 55.2%Net earnings per share — diluted:
Continuing operations $4.10 $2.34 75.2% 65.0%
Discontinued operations – 0.31 N/A
Total $4.10 $2.65 54.7% 45.7%Weighted average shares — basic 84.0 86.5 -3.0%
Weighted average shares — diluted 85.7 88.0 -2.7%
(a) Revenues from services include fees received from our franchise
offices of $26.8 million and $26.4 million for the nine months ended
September 30, 2007 and 2006, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$1,111.6 million and $1,143.8 million for the nine months ended
September 30, 2007 and 2006, respectively.Manpower Inc.
Operating Unit Results
(In millions)Nine Months Ended September 30
% Variance
Amount Constant
2007 2006 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $1,474.4 $1,587.0 -7.1% -7.1%
France 5,149.2 4,430.1 16.2% 7.7%
Other EMEA (b) 4,798.7 3,760.7 27.6% 17.8%
Italy (b) 993.1 810.4 22.5% 13.5%
Jefferson Wells 250.6 288.2 -13.0% -13.0%
Right Management 298.4 288.4 3.5% -0.5%
Other Operations 1,901.0 1,687.0 12.7% 10.7%
$14,865.4 $12,851.8 15.7% 8.9%Operating Unit Profit:
United States $61.7 $60.6 1.9% 1.9%
France 308.3 142.1 117.0% 102.3%
Other EMEA (b) 166.8 92.3 80.7% 67.6%
Italy (b) 70.1 47.3 48.1% 37.1%
Jefferson Wells 0.4 25.7 -98.4% -98.4%
Right Management 22.8 17.9 27.8% 23.3%
Other Operations 46.6 48.8 -4.9% -5.9%
676.7 434.7
Corporate expenses 64.7 62.6
Amortization of intangible assets 9.8 9.8
Operating profit 602.2 362.3 66.2% 55.3%
Interest and other expenses (c) 26.4 36.1
Earnings before income taxes and
discontinued operations $575.8 $326.2(a) In the United States, revenues from services include fees received
from the related franchise offices of $18.3 million and $17.9 million
for the nine months ended September 30, 2007 and 2006, respectively.
These fees are primarily based on revenues generated by the franchise
offices, which were $818.3 million and $860.1 million for the nine
months ended September 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 $46.5 $39.1
Interest income (24.3) (11.5)
Foreign exchange losses 0.1 2.5
Miscellaneous expenses, net 4.1 6.0
$26.4 $36.1Manpower Inc.
Consolidated Balance Sheets
(In millions)Sept. 30 Dec. 31
2007 2006
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $538.8 $687.9
Accounts receivable, net 4,537.3 3,837.2
Prepaid expenses and other assets 130.7 90.5
Future income tax benefits 88.8 66.4
Total current assets 5,295.6 4,682.0Other assets:
Goodwill and other intangible assets, net 1,402.2 1,293.6
Other assets 385.1 336.4
Total other assets 1,787.3 1,630.0Property and equipment:
Land, buildings, leasehold
improvements and equipment 747.1 693.2
Less: accumulated depreciation and
amortization 534.8 491.1
Net property and equipment 212.3 202.1
Total assets $7,295.2 $6,514.1LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $1,011.3 $889.9
Employee compensation payable 224.4 180.7
Accrued liabilities 805.8 562.1
Accrued payroll taxes and insurance 657.6 699.9
Value added taxes payable 622.2 517.0
Short-term borrowings and current
maturities of long-term debt 50.2 32.0
Total current liabilities 3,371.5 2,881.6Other liabilities:
Long-term debt 855.3 791.2
Other long-term liabilities 456.2 367.1
Total other liabilities 1,311.5 1,158.3Shareholders’ equity:
Common stock 1.0 1.0
Capital in excess of par value 2,472.9 2,420.7
Retained earnings 937.2 617.0
Accumulated other comprehensive
income 241.4 120.6
Treasury stock, at cost (1,040.3) (685.1)
Total shareholders’ equity 2,612.2 2,474.2
Total liabilities and
shareholders’ equity $7,295.2 $6,514.1Manpower Inc.
Consolidated Statements of Cash Flows
(In millions)Nine Months Ended
Sept. 30
2007 2006
(Unaudited)
Cash Flows from Operating Activities:
Net earnings $351.6 $233.6
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Gain on sale of business – (29.3)
Depreciation and amortization 68.2 65.8
Deferred income taxes (13.6) (22.2)
Provision for doubtful accounts 17.3 18.6
Share-based compensation 18.8 15.9
Excess tax benefit on exercise
of stock options (5.5) (7.0)
Changes in operating assets and liabilities,
excluding the impact of acquisitions:
Accounts receivable (430.1) (396.2)
Other assets (25.7) 22.7
Other liabilities 318.2 324.2
Cash provided by operating activities 299.2 226.1Cash Flows from Investing Activities:
Capital expenditures (65.8) (47.3)
Acquisitions of businesses, net of
cash acquired (100.2) (7.8)
Proceeds from sale of business – 29.6
Proceeds from sale of an equity interest – 8.8
Proceeds from the sale of property
and equipment 3.7 3.6
Cash used by investing activities (162.3) (13.1)Cash Flows from Financing Activities:
Net borrowings of short-term
facilities and long-term debt 15.7 (0.6)
Proceeds from stock option and
purchase plans 34.1 45.2
Excess tax benefit on exercise of
stock options 5.5 7.0
Repurchases of common stock (359.5) (235.9)
Dividends paid (27.1) (23.7)
Cash used by financing activities (331.3) (208.0)Effect of exchange rate changes on cash 45.3 24.6
Change in cash and cash equivalents (149.1) 29.6Cash and cash equivalents, beginning of period 687.9 454.9
Cash and cash equivalents, end of period $538.8 $484.5
First Call Analyst:
FCMN Contact: linda.granrose@na.manpower.com
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Source: Manpower Inc.
