Manpower Reports 1st Quarter Results

April 16, 2002 at 12:00 AM EDT
Manpower Reports 1st Quarter Results

MILWAUKEE, Wis., Apr 16, 2002 /PRNewswire-FirstCall via COMTEX/ -- Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended March 31, 2002 declined 74 percent to $6.9 million, or 9 cents per diluted share, from $26.8 million, or 35 cents per diluted share, a year earlier. Included in 2001 net income is $3.7 million of amortization of intangible assets which are no longer amortized in accordance with the new accounting rules effective January 1, 2002. Revenues for the first quarter were down 14 percent from the year-ago period to $2.3 billion. Systemwide sales were $2.5 billion. On a constant currency basis, earnings per share fell 71% on a 10% revenue decline.

"For the first time in several months we have seen an increase in demand for our services," Manpower Chairman and CEO Jeffrey A. Joerres stated. "While we are still below the prior year in sales, the direction of the trend in our two major markets, France and the U.S., has reversed. The second quarter is a pivotal quarter. We expect that it will determine the strength and pace of the recovery.

"We anticipate that a modest increase in demand for our services will continue throughout the second quarter. We are estimating earnings for the second quarter to be in the range of 23 to 27 cents per share," Mr. Joerres said.

In conjunction with its first quarter earnings release, Manpower will broadcast its conference call live over the Internet on April 16, 2002 at 9:00 a.m. CDT (10:00 a.m. EDT). Interested parties are invited to listen by logging on to http://investor.manpower.com.

Manpower Inc. is a world leader in the staffing industry, providing workforce management services and solutions to customers through 3,900 offices in 61 countries. The firm annually provides employment to 2 million people worldwide and is an industry leader in employee assessment and training. Manpower also provides a range of staffing solutions, engagement and consulting services worldwide under the subsidiary brands of Brook Street, Elan, The Empower Group and Jefferson Wells. More information on Manpower Inc. can be found at the company's Web site, http://www.manpower.com.

This news release contains statements, including revenue and 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 its Annual Report on Form 10K for the year ended December 31, 2001, which information is incorporated herein by reference, and such other factors as may be described from time to time in the Company's SEC filings.

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

                                                     Three Months Ended
                                                          March 31
                                               2002         2001      Variance
                                                         (Unaudited)

    Systemwide sales                         $2,540.0     $3,011.1     -15.6%

    Revenue from services                     2,284.0      2,651.9     -13.9%
    Cost of services                          1,869.2      2,168.0     -13.8%

      Gross profit                              414.8        483.9     -14.3%

    Selling and administrative expenses         396.1        431.7      -8.2%

      Operating profit                           18.7         52.2     -64.2%

    Interest and other expenses                   8.0         10.3     -22.5%

      Earnings before income taxes               10.7         41.9     -74.4%

    Provision for income taxes                    3.8         15.1     -74.4%

      Net earnings                               $6.9        $26.8     -74.4%

    Net earnings per share - basic              $0.09        $0.35     -74.3%

    Net earnings per share - diluted            $0.09        $0.35     -74.3%

    Weighted average shares - basic              76.1         75.8       0.3%

    Weighted average shares - diluted            77.3         76.9       0.5%


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                             Three Months Ended March 31
                                                               % Variance
                                                             Amount   Constant
                                          2002       2001   Reported  Currency
                                                      (Unaudited)
    Revenues from services:
      United States (a)                  $428.7     $546.3   -21.5%   -21.5%
      France                              767.1      939.2   -18.3%   -14.1%
      United Kingdom                      322.2      381.0   -15.4%   -13.3%
      Other Europe                        442.0      499.4   -11.5%    -6.8%
      Other Countries                     324.0      286.0    13.3%    21.9%
                                       $2,284.0   $2,651.9   -13.9%   -10.3%

    Operating Unit Profit:
      United States                       $(4.9)      $8.2     N/A      N/A
      France                               22.2       26.3   -15.7%   -11.4%
      United Kingdom                        3.2        9.8   -67.7%   -66.9%
      Other Europe                         10.5       19.3   -45.5%   -43.0%
      Other Countries                      (1.8)       2.0     N/A      N/A
                                           29.2       65.6
    Corporate expenses                     10.5        9.6
    Amortization of intangibles              --        3.8
        Operating profit                   18.7       52.2   -64.2%   -61.1%
    Interest and other expense (b)          8.0       10.3
        Earnings before taxes             $10.7      $41.9

    Footnotes:
    (a) Total systemwide sales in the United States, which includes sales of
        Company-owned branches and franchises were $654.0 and $861.5 for 2002
        and 2001 respectively.
    (b) The components of interest and other expense (income) were:

      Interest expense                     $9.9       $8.7
      Interest income                      (2.6)      (2.7)
      Translation loss (gain)               0.2        0.7
      Loss on sale of accounts receivable   0.1        2.3
      Miscellaneous                         0.4        1.3
                                           $8.0      $10.3


                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                   Mar. 31           Dec. 31
                                                     2002              2001
                                                 (Unaudited)
    ASSETS
    Current assets:
      Cash and cash equivalents                     $210.8            $245.8
      Accounts receivable, net                     1,847.4           1,917.8
      Prepaid expenses and other assets               74.0              77.0
      Future income tax benefits                      71.7              73.8
          Total current assets                     2,203.9           2,314.4

    Other assets:
      Intangible assets, net                         498.8             480.8
      Investments in licensees                        44.6              44.7
      Other assets                                   221.0             204.7
          Total other assets                         764.4             730.2

    Property and equipment:
      Land, buildings, leasehold
       improvements and equipment                    464.2             465.4
      Less: accumulated depreciation
       and amortization                              279.6             271.4
        Net property and equipment                   184.6             194.0
            Total assets                          $3,152.9          $3,238.6

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                              $458.0            $382.1
      Employee compensation payable                   80.9              93.2
      Accrued liabilities                            180.2             234.9
      Accrued payroll taxes and insurance            253.7             300.8
      Value added taxes payable                      244.2             255.9
      Short-term borrowings and current
        maturities of long-term debt                  21.4              23.7
          Total current liabilities                1,238.4           1,290.6

    Other liabilities:
      Long-term debt                                 805.6             811.1
      Other long-term liabilities                    323.1             322.6
          Total other liabilities                  1,128.7           1,133.7

    Shareholders' equity:
      Common stock                                     0.9               0.9
      Capital in excess of par value               1,654.1           1,644.9
      Accumulated deficit                           (380.7)           (387.6)
      Accumulated other comprehensive income (loss) (204.7)           (190.8)
      Treasury stock, at cost                       (283.8)           (253.1)
          Total shareholders' equity                 785.8             814.3
            Total liabilities and
             shareholders' equity                 $3,152.9          $3,238.6


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

                                                       Three Months Ended
                                                            March 31
                                                      2002             2001
                                                          (Unaudited)
    Cash Flows from Operating Activities:
      Net earnings                                    $6.9             $26.8
      Adjustments to reconcile net earnings to net
        cash provided by operating activities:
          Depreciation and amortization               14.9              18.2
          Deferred income taxes                        1.2               0.3
          Provision for doubtful accounts              4.9               4.8
          Changes in operating assets and liabilities:
            Amounts advanced under the
             Receivables Facility                       --             (67.0)
            Accounts receivable                       40.0              58.9
            Other assets                             (12.1)            (26.2)
            Other liabilities                        (25.4)             65.8
              Cash provided by operating activities   30.4              81.6

    Cash Flows from Investing Activities:
      Capital expenditures                           (14.1)            (21.6)
      Acquisitions of business, net of cash acquired (21.5)            (50.3)
      Proceeds from the sale of
       property and equipment                          1.3               1.2
              Net cash used by investing activities  (34.3)            (70.7)

    Cash Flows from Financing Activities:
      Net borrowings from short-term facilities
        and long-term debt                            (7.0)            (11.4)
      Proceeds from stock option and purchase plans    9.2               5.0
      Repurchase of common stock                     (30.7)             (3.3)
              Net cash used by financing activities  (28.5)             (9.7)

    Effect of exchange rate changes on cash           (2.6)             (9.4)
    Change in cash and cash equivalents              (35.0)             (8.2)

    Cash and cash equivalents, beginning of period   245.8             181.7
    Cash and cash equivalents, end of period        $210.8            $173.5


               
SOURCE Manpower Inc.