Manpower Reports 4th Quarter and Full-Year 2005 Results
Manpower Reports 4th Quarter and Full-Year 2005 Results
January 27, 2006 at 12:00 AM EST
Results for the fourth quarter were negatively affected by relatively weaker foreign currencies compared to the prior year period. On a constant currency basis, net earnings per diluted share for the quarter were $1.07 on an 8 percent improvement in revenues. The fourth quarter was positively impacted by a lower income tax rate as a result of tax planning that was completed during the quarter.
Jeffrey A. Joerres, Manpower Chairman and Chief Executive Officer, said, "The Manpower team across the world delivered another solid quarter to cap off a solid year. We had outstanding performances in several geographies, including the U.S., the Nordics, Italy, Australia and Elan, our European IT staffing company."
Net earnings per diluted share for the year ended December 31, 2005 were $2.87, an increase of 11% from $2.59 per diluted share in 2004. Net earnings were $260.1 million compared to $245.7 million in the prior year. Revenues for the year were $16.1 billion, an increase of 8 percent from the prior year. On a constant currency basis, net earnings per diluted share for the year were $2.89 on an 8 percent improvement in revenues.
Joerres stated, "We continue to make substantial progress on the strategic front with the expansion of our specialty businesses and the depth of Manpower offerings that are helping our clients win in their respective markets.
"The momentum that has been established in 2005 positions us well to take advantage of the positive market trends we are currently experiencing.
"We are anticipating the first quarter of 2006 diluted net earnings per share to be in the range of 36 to 39 cents. This includes an estimated negative currency impact of 3 cents and the impact of expensing stock options of 3 cents per diluted share."
Included in the 2004 results were first quarter non-operating gains of $14.2 million ($10.2 million net of income taxes), or 11 cents per diluted share and a third quarter favorable adjustment to the income tax provision of $8.0 million or 8 cents per diluted share.
In conjunction with its fourth quarter earnings release, Manpower will broadcast its conference call live over the Internet on January 27, 2006 at 7:30 a.m. CST (8:30 a.m. EST). 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, offering customers a continuum of services to meet their needs throughout the employment and business cycle. The company specializes in permanent, temporary and contract recruitment; employee assessment; training; career transition; organizational consulting; and professional financial services. 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, enabling customers to concentrate on their core business activities. In addition to the Manpower brand, the company operates under the brand names of Right Management Consultants, Jefferson Wells and Elan. More information on Manpower Inc. is available at http://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, 2004, which information is incorporated herein by reference.
Manpower Inc.
Results of Operations
(In millions, except per share data)
Three Months Ended December 31
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from services (a) $4,123.2 $4,072.7 1.2% 7.9%
Cost of services 3,352.4 3,308.5 1.3%
Gross profit 770.8 764.2 0.9% 7.1%
Selling and administrative expenses 638.5 646.7 -1.3% 4.6%
Operating profit 132.3 117.5 12.6% 20.5%
Interest and other expense 6.9 8.9 -22.0%
Earnings before income taxes 125.4 108.6 15.4%
Provision for income taxes 36.3 39.0 -7.0%
Net earnings $89.1 $69.6 27.9% 41.0%
Net earnings per share - basic $1.02 $0.77 32.5%
Net earnings per share - diluted $1.01 $0.73 38.4% 46.6%
Weighted average shares - basic 87.2 90.1 -3.3%
Weighted average shares - diluted 88.5 97.5 -9.2%
(a) Revenues from services include fees received from our franchise
offices of $9.1 million and $9.5 million for the three months ended
December 31, 2005 and 2004, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$388.6 million and $418.2 million for the three months ended
December 31, 2005 and 2004, respectively.
Manpower Inc.
Operating Unit Results
(In millions)
Three Months Ended December 31
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $534.2 $517.4 3.2% 3.2%
France 1,381.6 1,409.9 -2.0% 6.9%
EMEA 1,467.1 1,435.8 2.2% 10.9%
Jefferson Wells 96.1 102.9 -6.5% -6.5%
Right 97.4 106.9 -8.9% -5.4%
Other Operations 546.8 499.8 9.4% 12.3%
$4,123.2 $4,072.7 1.2% 7.9%
Operating Unit Profit:
United States $23.2 $16.8 38.4% 38.4%
France 47.3 55.0 -14.1% -6.2%
EMEA 53.9 41.3 30.4% 42.9%
Jefferson Wells 4.4 13.2 -66.5% -66.5%
Right 3.3 (0.4) N/A N/A
Other Operations 19.4 10.3 87.1% 91.3%
151.5 136.2
Corporate expenses 15.9 15.4
Amortization of intangible assets 3.3 3.3
Operating profit 132.3 117.5 12.6% 20.5%
Interest and other expense (b) 6.9 8.9
Earnings before income taxes $125.4 $108.6
(a) In the United States, revenues from services include fees received
from the related franchise offices of $6.5 million and $6.7 million
for the three months ended December 31, 2005 and 2004, respectively.
These fees are primarily based on revenues generated by the franchise
offices, which were $311.8 million and $310.4 million for the three
months ended December 31, 2005 and 2004, respectively.
(b) The components of interest and other expense (income) were:
Interest expense $11.9 $11.4
Interest income (3.4) (3.2)
Foreign exchange gains - (1.5)
Miscellaneous (income)
expense, net (1.6) 2.2
$6.9 $8.9
Manpower Inc.
Results of Operations
(In millions, except per share data)
Year Ended December 31
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from services (a) $16,080.4 $14,930.0 7.7% 7.7%
Cost of services 13,131.8 12,141.9 8.2%
Gross profit 2,948.6 2,788.1 5.8% 5.7%
Selling and administrative expenses 2,512.1 2,392.3 5.0% 4.9%
Operating profit 436.5 395.8 10.3% 10.9%
Interest and other expenses 41.8 26.3 59.2%
Earnings before income taxes 394.7 369.5 6.8%
Provision for income taxes 134.6 123.8 8.7%
Net earnings $260.1 $245.7 5.9% 7.9%
Net earnings per share - basic $2.95 $2.76 6.9%
Net earnings per share - diluted $2.87 $2.59 10.8% 11.6%
Weighted average shares - basic 88.1 88.9 -0.9%
Weighted average shares - diluted 91.1 96.8 -5.8%
(a) Revenues from services include fees received from our franchise
offices of $35.8 million and $34.5 million for the year ended
December 31, 2005 and 2004, respectively. These fees are primarily
based on revenues generated by the franchise offices, which were
$1,510.7 million and $1,487.1 million for the year ended December 31,
2005 and 2004, respectively.
Manpower Inc.
Operating Unit Results
(In millions)
Year Ended December 31
% Variance
Amount Constant
2005 2004 Reported Currency
(Unaudited)
Revenues from Services:
United States (a) $2,048.3 $2,041.1 0.4% 0.4%
France 5,532.0 5,226.7 5.8% 6.1%
EMEA 5,604.8 5,084.3 10.2% 10.7%
Jefferson Wells 386.2 340.6 13.4% 13.4%
Right 405.9 431.1 -5.9% -6.4%
Other Operations 2,103.2 1,806.2 16.4% 14.5%
$16,080.4 $14,930.0 7.7% 7.7%
Operating Unit Profit:
United States $68.7 $49.3 39.3% 39.3%
France 166.5 178.8 -6.9% -6.1%
EMEA 153.9 115.1 33.7% 36.6%
Jefferson Wells 33.3 51.4 -35.2% -35.2%
Right 24.5 24.5 0.0% -4.7%
Other Operations 61.7 46.0 34.1% 31.8%
508.6 465.1
Corporate expenses 59.0 57.0
Amortization of intangible assets 13.1 12.3
Operating profit 436.5 395.8 10.3% 10.9%
Interest and other expenses (b) 41.8 26.3
Earnings before income taxes $394.7 $369.5
(a) In the United States, revenues from services include fees received
from the related franchise offices of $24.9 million and $25.0 million
for the year ended December 31, 2005 and 2004, respectively. These
fees are primarily based on revenues generated by the franchise
offices, which were $1,196.9 million and $1,181.5 million for the
year ended December 31, 2005 and 2004, respectively.
(b) The components of interest and other expense (income) were:
Interest expense $46.7 $45.4
Interest income (9.8) (9.4)
Foreign exchange gains - (1.6)
Miscellaneous expense
(income), net 4.9 (8.1)
$41.8 $26.3
Manpower Inc.
Consolidated Balance Sheets
(In millions)
Dec. 31 Dec. 31
2005 2004
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $454.9 $531.8
Accounts receivable, net 3,208.2 3,227.8
Prepaid expenses and other assets 107.5 161.4
Future income tax benefits 72.6 96.5
Total current assets 3,843.2 4,017.5
Other assets:
Goodwill and other intangible
assets, net 1,256.5 1,297.0
Other assets 271.4 305.5
Total other assets 1,527.9 1,602.5
Property and equipment:
Land, buildings, leasehold
improvements and equipment 642.4 669.8
Less: accumulated depreciation and
amortization 446.0 446.7
Net property and equipment 196.4 223.1
Total assets $5,567.5 $5,843.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $685.4 $687.1
Employee compensation payable 150.6 156.0
Accrued liabilities 435.4 505.7
Accrued payroll taxes and insurance 607.2 569.6
Value added taxes payable 441.9 457.8
Short-term borrowings and current
maturities of long-term debt 260.0 225.7
Total current liabilities 2,580.5 2,601.9
Other liabilities:
Long-term debt 475.0 676.1
Other long-term liabilities 365.4 391.1
Total other liabilities 840.4 1,067.2
Shareholders' equity:
Common stock 1.0 1.0
Capital in excess of par value 2,346.7 2,296.4
Retained earnings 269.9 51.0
Accumulated other comprehensive
income (11.0) 109.4
Treasury stock, at cost (460.0) (283.8)
Total shareholders' equity 2,146.6 2,174.0
Total liabilities and
shareholders' equity $5,567.5 $5,843.1
Manpower Inc.
Consolidated Statements of Cash Flows
(In millions)
Year Ended
December 31
2005 2004
(Unaudited)
Cash Flows from Operating Activities:
Net earnings $260.1 $245.7
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 92.9 86.5
Amortization of discount on
convertible debentures 1.9 7.8
Deferred income taxes 50.0 (8.8)
Provision for doubtful accounts 22.9 27.3
Other non-operating gains (2.6) (14.2)
Changes in operating assets and
liabilities excluding
the impact of acquisitions:
Accounts receivable (350.4) (363.9)
Other assets (47.0) 41.5
Other liabilities 244.6 165.5
Cash provided by
operating activities 272.4 187.4
Cash Flows from Investing Activities:
Capital expenditures (77.6) (67.9)
Acquisitions of businesses, net of
cash acquired (12.9) (117.3)
Proceeds from sale of an equity
interest - 29.8
Proceeds from the sale of property
and equipment 4.8 5.6
Cash used by investing
activities (85.7) (149.8)
Cash Flows from Financing Activities:
Net borrowings of short-term
facilities and long-term debt 169.5 5.7
Cash paid to settle convertible
debentures (206.6) -
Proceeds from settlement of swap
agreements 50.7 -
Proceeds from stock option and
purchase plans 29.7 60.0
Repurchases of common stock (217.6) -
Dividends paid (41.2) (27.1)
Cash (used) provided by
financing activities (215.5) 38.6
Effect of exchange rate changes on
cash (48.1) 29.4
Change in cash and cash equivalents (76.9) 105.6
Cash and cash equivalents, beginning
of period 531.8 426.2
Cash and cash equivalents, end of
period $454.9 $531.8
SOURCE Manpower Inc.
Mike Van Handel, Chief Financial Officer of Manpower Inc., +1-414-906-6305
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