Form 8-K

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 18, 2006

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.)

 

5301 North Ironwood Road

Milwaukee, Wisconsin

  53217
(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 18, 2006, we issued a press release announcing our results of operations for the quarter ended March 31, 2006. 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 18, 2006
99.2   Presentation materials for April 18, 2006 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 18, 2006

   

By:

 

/s/ Michael J. Van Handel

       

Michael J. Van Handel

       

Executive Vice President,

Chief Financial Officer and Secretary

EXHIBIT INDEX

 

Exhibit No.  

Description

99.1   Press Release dated April 18, 2006
99.2   Presentation materials for April 18, 2006 conference call
Press Release dated April 18, 2006

Exhibit 99.1

[MANPOWER logo]

 

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

Manpower Inc. Reports 1st Quarter Results

MILWAUKEE, WI, USA, April 18, 2006 – Manpower Inc. (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2006 increased 63 percent to $52.6 million, or 59 cents per diluted share, compared to $32.2 million, or 35 cents per diluted share, a year earlier. Revenues for the first quarter were $3.9 billion, an increase of 5 percent from the year-earlier period.

Results for the first quarter were negatively impacted by relatively weaker foreign currencies compared to the first quarter of 2005. On a constant currency basis, diluted earnings per share were 65 cents on an 11 percent improvement in revenues. Included in the current year results is a 27 cents per diluted share gain on the sale of a payroll processing business in Sweden and a 16 cents per diluted share charge related to reorganization and a global cost reduction initiative.

Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, “The Manpower team across the world is performing well, and it shows in the results. When we get all cylinders firing, the leverage we can achieve is impressive. The United States, Italy, Germany, Sweden, Japan and other business units increased profitability by 30% or more compared to first quarter 2005. Excluding the one-time items, Manpower’s operating income increased 25 percent year over year, and earnings per share increased 37 percent in U.S. dollars and 51 percent in constant currency.”

Joerres added, “In addition to our strong performance this quarter, we also announced our new brand on February 21st, which is all about demonstrating the depth of our services and the strength of our leadership in the employment services industry. This effort has already had a positive impact with our clients and candidates.

“Given the current trends, we anticipate our second quarter diluted earnings per share to be in the range of 76 to 80 cents, which includes an estimated negative currency impact of 3 cents.”

 

- MORE -


Manpower Inc. Reports 1st Quarter Results/Page 2

 

In conjunction with its first quarter earnings release, Manpower will broadcast its conference call live over the Internet on April 18 at 7:30 a.m. CT (8:30 a.m. ET). 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 $16 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 72 countries and territories enables the company to meet the needs of its 400,000 customers 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 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 the information under the heading ‘Forward-Looking Statements’ in its Annual Report on Form 10-K for the year ended December 31, 2005, which information is incorporated herein by reference.

 

- ### -


Manpower Inc.

Results of Operations

(In millions, except per share data)

 

     Three Months Ended March 31  
     2006     2005    % Variance  
          Amount
Reported
    Constant
Currency
 
     (Unaudited)  

Revenues from services (a)

   $ 3,929.9     $ 3,758.7    4.6 %   11.5 %

Cost of services

     3,212.5       3,076.7    4.4 %  
                   

Gross profit

     717.4       682.0    5.2 %   11.8 %

Selling and administrative expenses

     657.7       619.5    6.2 %   12.5 %
                   

Operating profit

     59.7       62.5    -4.6 %   5.0 %

Interest and other (income) expense

     (16.3 )     11.7    N/A    
                   

Earnings before income taxes

     76.0       50.8    49.7 %  

Provision for income taxes

     23.4       18.6    26.0 %  
                   

Net earnings

   $ 52.6     $ 32.2    63.2 %   79.4 %
                   

Net earnings per share - basic

   $ 0.60     $ 0.36    66.7 %  
                   

Net earnings per share - diluted

   $ 0.59     $ 0.35    68.6 %   85.7 %
                   

Weighted average shares - basic

     87.4       89.8    -2.6 %  
                   

Weighted average shares - diluted

     88.7       96.9    -8.5 %  
                   

 

(a) Revenues from services include fees received from our franchise offices of $8.0 million and $8.3 million for the three months ended March 31, 2006 and 2005, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $362.8 million and $349.8 million for the three months ended March 31, 2006 and 2005, respectively.


Manpower Inc.

Operating Unit Results

(In millions)

 

     Three Months Ended March 31  
     2006     2005    % Variance  
          Amount
Reported
    Constant
Currency
 
     (Unaudited)  

Revenues from Services:

         

United States (a)

   $ 510.3     $ 475.9    7.2 %   7.2 %

France

     1,259.1       1,247.5    0.9 %   9.9 %

EMEA

     1,414.3       1,333.1    6.1 %   15.3 %

Jefferson Wells

     95.5       92.7    3.0 %   3.0 %

Right Management

     96.0       104.0    -7.7 %   -4.3 %

Other Operations

     554.7       505.5    9.8 %   14.1 %
                   
   $ 3,929.9     $ 3,758.7    4.6 %   11.5 %
                   

Operating Unit Profit:

         

United States

   $ 9.5     $ 4.9    93.3 %   93.3 %

France

     29.7       27.5    7.9 %   17.6 %

EMEA

     23.1       15.0    54.0 %   69.3 %

Jefferson Wells

     5.7       8.1    -29.4 %   -29.4 %

Right Management

     4.3       9.8    -55.9 %   -56.9 %

Other Operations

     17.9       12.5    43.1 %   52.0 %
                   
     90.2       77.8     

Corporate expenses

     27.3       12.1     

Amortization of intangible assets

     3.2       3.2     
                   

Operating profit

     59.7       62.5    -4.6 %   5.0 %

Interest and other (income) expense

     (16.3 )     11.7     
                   

Earnings before income taxes

   $ 76.0     $ 50.8     
                   

 

(a) In the United States, revenues from services include fees received from the related franchise offices of $5.3 million and $5.4 million for the three months ended March 31, 2006 and 2005, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $282.3 million and $277.6 million for the three months ended March 31, 2006 and 2005, respectively.

 

(b) The components of interest and other (income) expense were:

 

     2006     2005  

Interest expense

   $ 11.6     $ 11.6  

Interest income

     (3.3 )     (2.3 )

Foreign exchange losses

     0.9       0.8  

Miscellaneous (income) expenses, net

     (25.5 )     1.6  
                
   $ (16.3 )   $ 11.7  
                


Manpower Inc.

Consolidated Balance Sheets

(In millions)

 

    

Mar. 31

2006

   

Dec. 31

2005

 
     (Unaudited)  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 554.5     $ 454.9  

Accounts receivable, net

     3,162.2       3,208.2  

Prepaid expenses and other assets

     129.0       107.5  

Future income tax benefits

     84.0       71.1  
                

Total current assets

     3,929.7       3,841.7  

Other assets:

    

Goodwill and other intangible assets, net

     1,264.9       1,256.5  

Other assets

     294.4       273.8  
                

Total other assets

     1,559.3       1,530.3  

Property and equipment:

    

Land, buildings, leasehold improvements and equipment

     654.8       642.4  

Less: accumulated depreciation and amortization

     460.5       446.0  
                

Net property and equipment

     194.3       196.4  
                
   $ 5,683.3     $ 5,568.4  
                

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 793.0     $ 685.4  

Employee compensation payable

     140.2       150.6  

Accrued liabilities

     474.3       435.4  

Accrued payroll taxes and insurance

     507.3       607.2  

Value added taxes payable

     420.8       441.9  

Short-term borrowings and current maturities of long-term debt

     268.7       260.0  
                

Total current liabilities

     2,604.3       2,580.5  

Other liabilities:

    

Long-term debt

     485.7       475.0  

Other long-term liabilities

     388.0       366.3  
                

Total other liabilities

     873.7       841.3  

Shareholders’ equity:

    

Common stock

     1.0       1.0  

Capital in excess of par value

     2,372.1       2,346.7  

Retained earnings

     322.5       269.9  

Accumulated other comprehensive income

     (3.0 )     (11.0 )

Treasury stock, at cost

     (487.3 )     (460.0 )
                

Total shareholders’ equity

     2,205.3       2,146.6  
                

Total liabilities and shareholders’ equity

   $ 5,683.3     $ 5,568.4  
                


Manpower Inc.

Consolidated Statements of Cash Flows

(In millions)

 

     3 Months Ended
March 31
 
     2006     2005  
     (Unaudited)  

Cash Flows from Operating Activities:

    

Net earnings

   $ 52.6     $ 32.2  

Adjustments to reconcile net earnings to net cash provided by operating activities:

    

Depreciation and amortization

     21.8       23.1  

Amortization of discount on convertible debentures

     —         1.9  

Deferred income taxes

     (10.0 )     (9.8 )

Provision for doubtful accounts

     6.1       4.3  

Stock based compensation

     4.6       —    

Other non-operating gains

     (29.3 )     —    

Changes in operating assets and liabilities excluding the impact of acquisitions:

    

Accounts receivable

     76.9       120.7  

Other assets

     (19.5 )     (15.4 )

Other liabilities

     (26.0 )     (71.0 )
                

Cash provided by operating activities

     77.2       86.0  
                

Cash Flows from Investing Activities:

    

Capital expenditures

     (15.2 )     (19.2 )

Acquisitions of businesses, net of cash acquired

     (7.2 )     (2.2 )

Proceeds from sale of business

     29.6       —    

Proceeds from sale of an equity interest

     8.8       —    

Proceeds from the sale of property and equipment

     2.2       1.3  
                

Cash provided (used) by investing activities

     18.2       (20.1 )
                

Cash Flows from Financing Activities:

    

Net borrowings of short-term facilities and long-term debt

     3.2       11.2  

Cash paid to settle convertible debentures

     —         (206.6 )

Proceeds from settlement of swap agreements

     —         50.7  

Proceeds from stock option and purchase plans

     26.5       6.6  

Repurchases of common stock

     (33.0 )     (47.2 )

Dividends paid

     —         —    
                

Cash used by financing activities

     (3.3 )     (185.3 )
                

Effect of exchange rate changes on cash

     7.5       (15.6 )
                

Change in cash and cash equivalents

     99.6       (135.0 )

Cash and cash equivalents, beginning of period

     454.9       531.8  
                

Cash and cash equivalents, end of period

   $ 554.5     $ 396.8  
                
Presentation materials for April 18, 2006 conference call
Manpower Inc.
2006 1
st
Quarter Results
Now
Next
April 18, 2006
Exhibit 99.2


2
Manpower
Inc.
2006
1
st
Quarter
Results
Forward Looking Statement
This presentation includes forward-looking statements which are
subject to risks and uncertainties. Actual results might differ
materially from those projected in the forward-looking statements.
Forward-looking statements can be identified by words such as
“expect,”
“plan,”
“may,”
“will,”
and similar expressions.  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, 2005, 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.


3
Manpower
Inc.
2006
1
st
Quarter
Results
Consolidated Financial Highlights
Operating Profit
$60M
OP Margin
1.5%
86% CC
Revenue
$3.9B
Gross Margin
18.3%
EPS
$
.59
($
.48
as
adjusted*)
5%
11% CC
12 bps
14 bps
69%
5%
5% CC
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.
* Represents diluted earnings per share for the quarter adjusted
to exclude the one-time non-
operating gain and the expenses related to reorganization charges and Project Titan, a global cost
reduction initiative.  As Adjusted earnings are further explained on slide 14 of this presentation
and on our Web site.


4
Manpower
Inc.
2006
1
st
Quarter
Results
18.26%
18.14%
16%
17%
18%
19%
Q1 2005
Temporary
Recruitment
Permanent
Recruitment
Mix - Right
Q1 2006
- 0.22%
+ 0.24%
+ 0.10%
Consolidated Gross Profit Margin Change


5
Manpower
Inc.
2006
1
st
Quarter
Results
United States Segment
Q1 Financial Highlights
7%
OUP Margin
1.9%
90 bps
Revenue
$510M
OUP
$9M
93%
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.


6
Manpower
Inc.
2006
1
st
Quarter
Results
contemporary working
France Segment
Q1 Financial Highlights
OUP Margin
2.4%
Revenue
$1.3B
OUP
$30M
1%
10% CC
20 bps
8%
18% CC


7
Manpower Inc. 2006 1
st
Quarter Results
EMEA Segment
contemporary working
Q1 Financial Highlights
OUP Margin
1.6%
Revenue
$1.4B
OUP
$23M
6%
15% CC
50 bps
54%
69% CC


8
Manpower
Inc.
2006
1
st
Quarter
Results
23%
19%
17%
11%
-18%
13%
12%
-12%
23%
20%
28%
30%
18%
19%
10%
8%
Other
Spain
Holland
Germany
Elan
UK - Manpower
Italy
Nordics
EMEA –
Q1 Revenue Growth YoY
Revenue
Growth
-
CC
Revenue Growth
% of Segment
Revenue
18%
17%
16%
12%
8%
7%
7%
15%


9
Manpower
Inc.
2006
1
st
Quarter
Results
Jefferson Wells Segment
contemporary working
Q1 Financial Highlights
OUP Margin
6.0%
Revenue
$96M
OUP
$6M
270 bps
3%
29%


10
Manpower
Inc.
2006
1
st
Quarter
Results
Right Management Segment
contemporary working
Q1 Financial Highlights
OUP Margin
4.5%
Revenue
$96M
OUP
$4M
8%
4% CC
490 bps
56%
57% CC


11
Manpower
Inc.
2006
1
st
Quarter
Results
Other Operations Segment
contemporary working
Q1 Financial Highlights
OUP Margin
3.2%
Revenue
$555M
OUP
$18M
10%
14% CC
70 bps
43%
52% CC


12
Manpower
Inc.
2006
1
st
Quarter
Results
27%
38%
-4%
7%
2%
31%
25%
-3%
Other
Mexico
Australia/NZ
Japan
Other Operations –
Q1 Revenue Growth YoY
Revenue
Growth
-
CC
Revenue Growth
% of Segment
Revenue
37%
16%
15%
32%


13
Manpower
Inc.
2006
1
st
Quarter
Results
Financial Highlights


14
Manpower
Inc.
2006
1
st
Quarter
Results
2006
Gain on Sale
Reorganization
Project
2006
As Reported
of Business
Charges
Titan
As Adjusted
Revenue
3,929.9
$      
-
$         
-
$           
-
$         
3,929.9
$      
Cost of services
3,212.5
        
-
           
-
             
-
           
3,212.5
        
  Gross profit
717.4
           
-
           
-
             
-
           
717.4
           
Selling and administrative expenses
657.7
           
-
           
(9.0)
            
(9.2)
          
639.5
           
  Operating profit
59.7
             
-
           
9.0
             
9.2
           
77.9
             
Interest and other (income) expense
(16.3)
            
29.3
         
(1.7)
            
-
           
11.3
             
  Earnings before income taxes
76.0
             
(29.3)
        
10.7
           
9.2
           
66.6
             
Provision for income taxes
23.4
             
(5.6)
          
3.1
             
3.4
           
24.3
             
Net earnings
52.6
$           
(23.7)
$      
7.6
$           
5.8
$         
42.3
$           
Net earnings per share - diluted
0.59
$           
(0.27)
$      
0.09
$         
0.07
$       
0.48
$           
Impact of One-Time Items
($ in millions, except per share data)


15
Manpower
Inc.
2006
1
st
Quarter
Results
39%
29%
26%
25%
0%
10%
20%
30%
40%
2003
2004
2005
Q1 2006
Total Debt
Net Debt
416
370
280
200
842
902
735
754
0
200
400
600
800
1,000
2003
2004
2005
Q1 2006
Balance Sheet Highlights
Total Debt
($ in millions)
Total Debt to
Total Capitalization


16
Manpower
Inc.
2006
1
st
Quarter
Results
* 612,600 shares in 2006 and 1,065,000 shares in 2005
Proceeds from Sale of Business
Cash Flow Summary –
First Quarter
2006
2005
Cash from Operations
77
$      
86
$      
Capital Expenditures
(15)
(19)
Free Cash Flow
62
67
Share Repurchases *
(33)
(47)
Change in Debt
3
(145)
Other
11
(17)
Change in Cash
100
$   
(135)
$     
($ in millions)
30
-
Proceeds from Stock Option
and Purchase Plans
27
7


17
Manpower
Inc.
2006
1
st
Quarter
Results
Up
3-5%
Second Quarter Outlook
Revenue
U.S.
Up 4-6%
France
Up
3-5%
(Up 7-9% CC)
EMEA
(Up 7-9% CC)
Jefferson Wells
Right
Down 5-7%
(Down 3-5% CC)
Other
Up 9-11%
(Up 12-14% CC)
Total
Up 4-6%
(Up 7-9% CC)
Gross Profit Margin
18.4 -
18.6%
Operating Profit Margin
2.8 –
3.0%
Tax Rate
36.5%
EPS
$.76 -
$.80
(Neg. $.03 Currency)
Up 7-9%


2006 1
st
Quarter Results
Questions?
Answers
April 18, 2006