form_8k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 21, 2010

MANPOWER INC.
(Exact name of registrant as specified in its charter)
 
 
Wisconsin
1-10686
39-1672779
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)


100 Manpower Place
 
Milwaukee, Wisconsin
53212
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code:  (414) 961-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
Item 2.02   Results of Operations and Financial Condition

On April 21, 2010, we issued a press release announcing our results of operations for the three months ended March 31, 2010. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01.                      Exhibits.

Exhibit No.
 
Description
  99.1  
Press Release dated April 21, 2010
  99.2  
Presentation materials for April 21, 2010 conference call
       
 

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.


     
MANPOWER INC.
 
         
Dated:  April 21, 2010
 
By:
/s/ Michael J. Van Handel
 
     
Michael J. Van Handel
Executive Vice President and
Chief Financial Officer
 
 

 
EXHIBIT INDEX

Exhibit No.
 
Description
  99.1  
Press Release dated April 21, 2010
  99.2  
Presentation materials for April 21, 2010 conference call

exhibit_99-1.htm
               Exhibit 99.1
 
 
 

 

 
FOR IMMEDIATE RELEASE                                     Contact:
Mike Van Handel
Manpower Inc.
+1.414.906.6305
michael.vanhandel@manpower.com

Manpower Reports 1st Quarter 2010 Results

 
MILWAUKEE, WI, USA, April 21, 2010 – Manpower Inc. (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2010 were $2.8 million, or 4 cents per diluted share, compared to a loss of $1.8 million, or 2 cents per diluted share, a year earlier. Revenues for the first quarter were $4.1 billion, an increase of 13% from the year earlier period, or 5% in constant currency.
 
Net earnings in the first quarter were favorably impacted by 3 cents per diluted share, as foreign currencies were relatively stronger compared to the prior year period..
 
In December 2009 the French government published changes to its business tax law effective in 2010.  Under the new law, a component of the business tax calculation is based upon added value (revenue less expenses as defined in the legislation).  Under U.S. Generally Accepted Accounting Principles (GAAP), a tax of this nature is classified as a component of the income tax provision.  Accordingly, the charge of $13.7 million related to this business tax was included in our provision for income taxes in the quarter.  Previously this amount would have been classified as a component of Cost of Services.  The amount of the business tax did not change materially as a result of the new calculation and, therefore, net earnings were not impacted.
 
Jeffrey A. Joerres, Manpower Inc. Chairman and Chief Executive Officer, said, “The Manpower team throughout the world performed extremely well.  We were able to exceed our anticipated revenue plans while we effectively managed our expenses.  In all major geographies we are experiencing strong cyclical trends and even stronger secular trends as companies need to respond to the increased demand but want to remain agile.
 
“Our major geographies, the U.S., France, Germany, U.K. and others, all have stronger revenue trajectories exiting the first quarter.
 
“In early April we completed the acquisition of COMSYS IT Partners, Inc.  This acquisition is an important component of our strategy, when coupled with our organic growth, as we aggressively expand our presence in the specialty staffing area.
 
"We anticipate that favorable economic trends will continue into the second quarter, resulting in earnings per share of 14 cents to 22 cents.  This includes a negative impact of 10 cents per share related to the COMSYS acquisition. We anticipate the impact of currency changes on the quarter will be negligible.”
 
In conjunction with its first quarter earnings release, Manpower will broadcast its conference call live over the Internet on April 21, 2010 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 workforce solutions; creating and delivering services that enable its clients to win in the changing world of work. With more than 60 years of experience, Manpower offers employers a range of solutions and 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 nearly 4000 offices in 82 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 www.manpower.com.
 
Forward-Looking Statements
This news release contains statements, including statements regarding economic trends and future profitability, 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, 2009, 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
 
   
2010
   
2009
   
Reported
   
Currency
 
   
(Unaudited)
 
Revenues from services (a) (b)
  $ 4,099.3     $ 3,643.0       12.5 %     5.1 %
Cost of services
    3,397.8       2,977.3       14.1 %     6.6 %
    Gross profit
    701.5       665.7       5.4 %     -1.4 %
Selling and administrative expenses
    668.9       664.3       0.7 %     -5.5 %
    Operating profit
    32.6       1.4       N/A       N/A  
Interest and other expenses
    12.9       11.9       8.7 %        
    Earnings (loss) before income taxes
    19.7       (10.5 )     N/A       N/A  
Provision for income taxes
    16.9       (8.7 )     N/A          
    Net earnings (loss)
  $ 2.8     $ (1.8 )     N/A       N/A  
Net earnings (loss) per share - basic
  $ 0.04     $ (0.02 )     N/A          
Net earnings (loss) per share - diluted
  $ 0.04     $ (0.02 )     N/A       N/A  
Weighted average shares - basic
    78.6       78.1       0.6 %        
Weighted average shares - diluted
    79.9       78.1       2.2 %        
                                 
(a) Revenues from services include fees received from our franchise offices of $4.6 million and $5.1 million for the three months ended March 31, 2010 and 2009, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $193.9 million and $158.9 million for the three months ended March 31, 2010 and 2009, respectively.
 
                                 
(b) Our 2009 results have been restated as disclosed in Note 16 to the Consolidated Financial Statements included in our 2009 Annual Report to Shareholders.
 
 

 
Manpower Inc.
 
Operating Unit Results
 
(In millions)
 
                         
   
Three Months Ended March 31
 
               
% Variance
 
               
Amount
   
Constant
 
   
2010
   
2009
   
Reported
   
Currency
 
   
(Unaudited)
 
Revenues from Services:
                       
  Americas:
                       
      United States  (a)
  $ 442.1     $ 373.8       18.3 %     18.3 %
      Other Americas
    294.5       219.2       34.4 %     22.8 %
      736.6       593.0       24.2 %     19.9 %
                                 
  France
    1,107.5       956.9       15.7 %     9.3 %
  EMEA:
                               
      Italy
    234.2       220.4       6.3 %     0.4 %
      Other EMEA (b)
    1,379.6       1,258.8       9.6 %     0.4 %
      1,613.8       1,479.2       9.1 %     0.4 %
  Asia Pacific
    497.5       425.2       17.0 %     5.3 %
  Right Management
    103.3       136.0       -24.0 %     -27.9 %
  Jefferson Wells
    40.6       52.7       -22.9 %     -22.9 %
    $ 4,099.3     $ 3,643.0       12.5 %     5.1 %
Operating Unit (Loss) Profit:
                               
  Americas:
                               
      United States  (a)
  $ (8.4 )   $ (14.5 )     N/A       N/A  
      Other Americas
    9.6       4.8       101.0 %     87.1 %
      1.2       (9.7 )     N/A       N/A  
                                 
  France
    0.2       1.0       -83.9 %     -69.7 %
  EMEA:
                               
      Italy
    6.8       1.4       386.1 %     362.9 %
      Other EMEA (b)
    16.8       (3.4 )     N/A       N/A  
      23.6       (2.0 )     N/A       N/A  
  Asia Pacific
    12.5       12.1       3.6 %     -9.3 %
  Right Management
    12.5       29.1       -56.9 %     -58.1 %
  Jefferson Wells
    (4.7 )     (7.5 )     N/A       N/A  
      45.3       23.0                  
Corporate expenses
    (26.4 )     (21.6 )                
Reclassification of French business tax
    13.7       -                  
    Operating profit
    32.6       1.4       N/A       N/A  
Interest and other expenses (c)
    (12.9 )     (11.9 )                
    Earnings (loss) before income taxes
  $ 19.7     $ (10.5 )                
                                 
(a) In the United States, revenues from services include fees received from our franchise offices of $2.5 million and $2.0 million for the three months ended March 31, 2010 and 2009, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $132.2 million and $94.9 million for the three months ended March 31, 2010 and 2009, respectively.
 
                                 
(b) Our 2009 results have been restated as disclosed in Note 16 to the Consolidated Financial Statements included in our 2009 Annual Report to Shareholders.
 
                                 
(c) The components of interest and other expenses were:
                 
      2010       2009                  
        Interest expense
  $ 11.1     $ 13.1                  
        Interest income
    (1.6 )     (4.4 )                
        Foreign exchange losses
    1.9       0.5                  
        Miscellaneous expenses, net
    1.5       2.7                  
    $ 12.9     $ 11.9                  
 


 
Manpower Inc.
 
Consolidated Balance Sheets
 
(In millions)
 
             
   
Mar. 31
   
Dec. 31
 
   
2010
   
2009
 
   
(Unaudited)
 
ASSETS
           
Current assets:
           
  Cash and cash equivalents
  $ 943.8     $ 1,014.6  
  Accounts receivable, net
    3,075.7       3,070.8  
  Prepaid expenses and other assets
    202.4       179.6  
  Future income tax benefits
    55.7       67.4  
      Total current assets
    4,277.6       4,332.4  
Other assets:
               
  Goodwill and other intangible assets, net
    1,334.9       1,357.5  
  Other assets
    339.9       347.5  
      Total other assets
    1,674.8       1,705.0  
Property and equipment:
               
  Land, buildings, leasehold improvements and equipment
    666.2       703.6  
  Less:  accumulated depreciation and amortization
    503.6       527.2  
    Net property and equipment
    162.6       176.4  
        Total assets
  $ 6,115.0     $ 6,213.8  
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current liabilities:
               
  Accounts payable
  $ 1,008.7     $ 944.4  
  Employee compensation payable
    159.4       187.8  
  Accrued liabilities
    465.8       465.9  
  Accrued payroll taxes and insurance
    515.4       572.0  
  Value added taxes payable
    401.2       391.2  
  Short-term borrowings and current maturities of long-term debt
    42.2       41.7  
      Total current liabilities
    2,592.7       2,603.0  
Other liabilities:
               
  Long-term debt
    675.5       715.6  
  Other long-term liabilities
    360.2       358.7  
      Total other liabilities
    1,035.7       1,074.3  
Shareholders' equity:
               
  Common stock
    1.0       1.0  
  Capital in excess of par value
    2,555.5       2,544.2  
  Retained earnings
    1,112.4       1,109.6  
  Accumulated other comprehensive income
    43.9       106.9  
  Treasury stock, at cost
    (1,226.2 )     (1,225.2 )
      Total shareholders' equity
    2,486.6       2,536.5  
        Total liabilities and shareholders' equity
  $ 6,115.0     $ 6,213.8  
 


 
Manpower Inc.
 
Consolidated Statements of Cash Flows
 
(In millions)
 
             
   
Three Months Ended
 
   
Mar. 31
 
   
2010
   
2009
 
   
(Unaudited)
 
Cash Flows from Operating Activities:
           
  Net earnings (loss)
  $ 2.8     $ (1.8 )
  Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
               
      Depreciation and amortization
    21.4       23.2  
      Deferred income taxes
    (9.5 )     2.0  
      Provision for doubtful accounts
    4.1       6.6  
      Share-based compensation
    5.5       4.1  
      Excess tax benefit on exercise of stock options
    (0.1 )     (0.1 )
  Changes in operating assets and liabilities, excluding the impact of acquisitions:
               
      Accounts receivable
    (127.1 )     572.3  
      Other assets
    (35.6 )     (41.5 )
      Other liabilities
    95.5       (315.0 )
            Cash (used in) provided by operating activities
    (43.0 )     249.8  
Cash Flows from Investing Activities:
               
  Capital expenditures
    (7.8 )     (8.9 )
  Acquisitions of businesses, net of cash acquired
    (0.1 )     (10.6 )
  Proceeds from the sale of property and equipment
    0.3       1.0  
            Cash used in investing activities
    (7.6 )     (18.5 )
Cash Flows from Financing Activities:
               
  Net change in short-term borrowings
    0.2       (17.0 )
  Proceeds from long-term debt
    1.5       77.6  
  Repayments of long-term debt
    (0.7 )     (116.1 )
  Proceeds from share-based awards
    4.9       4.7  
  Excess tax benefit on exercise of stock options
    0.1       0.1  
            Cash provided by (used in) financing activities
    6.0       (50.7 )
Effect of exchange rate changes on cash
    (26.2 )     (53.6 )
Change in cash and cash equivalents
    (70.8 )     127.0  
Cash and cash equivalents, beginning of period
    1,014.6       874.0  
Cash and cash equivalents, end of period
  $ 943.8     $ 1,001.0  
exhibit_99-2.htm
                                          
 
 
Helping Clients and Candidates
   
Win for Over Six Decades
 
 
2010 April 21
MANPOWER INC.
2010 1st Quarter Results
Exhibit 99.2
 
 

 
2
 This presentation includes forward-looking
 statements, including earnings projections
 which are subject to risks and uncertainties.
 Actual results might differ materially from
 those projected in the forward-looking
 statements. Additional information concerning
 factors that could cause actual results to
 materially differ from those in the forward-
 looking statements is contained in the
 Company’s Annual Report on Form 10-K
 dated December 31, 2009, 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.
Forward-Looking Statement
 
 

 
3
 N/A
 N/A
13%
5% CC
80 bps
Operating Profit $33M
OP Margin 0.8%
Revenue $4.1B
Gross Margin 17.1% 
EPS $.04
120 bps
N/A
N/A
Q1 Highlights
Throughout this presentation, the difference between reported variances and Constant Currency (CC) variances
represents the impact of currency on our financial results. Constant Currency is further explained on our Web site.
(1) 2009 results include non-recurring items, including reorganization charges, totaling a net benefit of $6M
 before income taxes.
(1)
Consolidated Financial Highlights
 
 

 
4
Consolidated Gross Margin Change
 
 

 
5
20% CC
Q1 Financial Highlights
24%
OUP Margin
0.2%
180 bps
Revenue
$737M
OUP
$1M
Operating Unit Profit (OUP) is the measure that we use to evaluate segment
performance. OUP is equal to segment revenues less direct costs and branch and
national headquarters operating costs.
(1) Included in these amounts is the US, which had revenue of $442M (+18%) and OUP loss of $8M.
(1)
N/A
N/A
(2) 2009 includes reorganization charges totaling $0.9M.
(2)
Americas Segment
(18% of Revenue)
 
 

 
6
Revenue Growth - CC
Revenue Growth
% of Segment
Revenue
60%
14%
9%
 17%
Americas - Q1 Revenue Growth YoY
 
 

 
7
7
France Segment
(27% of Revenue)
Q1 Financial Highlights
OUP Margin
0.0%
Revenue
$1.1B
OUP
$0M
16%
9% CC
10 bps
84%
70% CC
(1)
(1) 2009 includes non-recurring items, including reorganization charges, totaling a net benefit of $3.2M.
(1)
(1)
 
 

 
8
(1) Included in these amounts is Italy, which had revenue of $234M (+6% in USD, 0% in CC) and OUP of
 $7M (+386% in USD, +363% in CC).
(2) 2009 includes non-recurring items, including reorganization charges, totaling a net benefit of $1.7M.
Q1 Financial Highlights
OUP Margin
1.5%
Revenue
$1.6B
OUP
$24M
9%
0% CC
160 bps
N/A
N/A
(1)
(2)
EMEA Segment
(39% of Revenue)
 
 

 
9
Revenue Growth - CC
Revenue Growth
% of Segment
Revenue
15%
14%
13%
11%
10%
5%
 23%
9%
EMEA - Q1 Revenue Growth YoY
 
 

 
10
Q1 Financial Highlights
OUP Margin
2.5%
Revenue
$497M
OUP
$13M
17%
5% CC
30 bps
4%
9% CC
(1)
(1)
(1)
(1) 2009 includes non-recurring items, including reorganization charges, totaling a net benefit of $3.9M.
Asia Pacific Segment
(12% of Revenue)
 
 

 
11
Revenue Growth - CC
Revenue Growth
% of Segment
Revenue
52%
25%
23%
Asia Pacific - Q1 Revenue Growth YoY
 
 

 
12
57%
58% CC
Q1 Financial Highlights
OUP Margin
12.1%
Revenue
$103M
OUP
$13M
24%
28% CC
930 bps
Right Management Segment
(3% of Revenue)
 
 

 
13
Jefferson Wells Segment
(1% of Revenue)
Q1 Financial Highlights
OUP Margin
- 11.7%
Revenue
$41M
OUP
$(5M)
250 bps
23%
N/A
(1)
(1) 2009 includes reorganization charges totaling $0.9M.
 
 

 
14
Financial Highlights
 
 

 
15
Results of Operations - Business Tax
Reclassification
(in millions of USD)
 
 

 
16
Reclass of French
Business Tax to
Provision for
Income Taxes
Segment Operating Unit Results
(in millions of USD)
 
 

 
17
Other
5
Change in Cash
(71)
127
7
2010
2009
Cash from Operations
(43)
250
Capital Expenditures
(8)
(9)
 Free Cash Flow
(51)
241
Share Repurchases
-
-
Change in Debt
-
(56)
($ in millions)
Effect of Exchange Rate Changes
(26)
(54)
Acquisitions of Businesses,
 net of cash acquired
(11)
1
Cash Flow Summary - Q1
 
 

 
18
Total Debt
($ in millions)
Total Debt to
 
 

 
19
(b)
(b)
(a)
(a)
This $400M agreement requires, as of March 31, that we comply with a Debt-to-EBITDA ratio of less than 5.75 to 1 and a fixed charge
coverage ratio of greater than 1.25 to 1. As defined in the agreement, we had a Debt-to-EBITDA ratio of 3.00 and a fixed charge coverage
ratio of 1.63 as of March 31, 2010.
As of March 31, there were $6.0M of standby letters of credit issued under the agreement.
Interest
Rate
Maturity
Date
Total
Outstanding
Remaining
Available
Euro Notes:
- Euro 200M
4.86%
June 2013
269
-
- Euro 300M
4.58%
June 2012
405
-
Revolving Credit Agreement
2.80%
Nov 2012
-
394
351
Uncommitted lines and Other
Various
Various
44
Total Debt
718
745
Credit Facilities as of March 31, 2010
($ in millions)
 
 

 
20
Closing date:
April 5, 2010
Consideration:
Cash
$192M
Stock
188M
(3.2M shares @ $58.94  per share)
Debt Retired
47M
$427M
(1)
(1) Represents the closing stock price on April 5, which is higher than the average stock price of $57.98 used
 to determine the conversion ratio for the tender offer.
Comsys Acquisition Summary 
 
 

 
21
Revenue
Americas
Up 54-56%
France
Up 13-15%
(Up 14-16% CC)
Up 16-18%
Asia Pacific
(Up 9-11% CC)
Jefferson Wells
Right Management
 Down 27-29%
(Down 29-31% CC)
 Up 17-19%
(Up 16-18% CC)
Total
Gross Profit Margin
17.5-17.7%
Operating Profit Margin
1.1-1.3%
Tax Rate
63%
EPS
$0.14-$0.22 ($0.24-$0.32 before Comsys)
 Down 11-13%
EMEA
(Up 10-12% CC)
Up 11-13%
(Up 52-54% CC)
Second Quarter Outlook
 
 

 
Questions?
Answers
April 21, 2010
Manpower Inc.
2010 1st Quarter Results